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Wednesday, January 29, 2014

Protecting & Growing Your Business in Jamaica – A Legal Perspective


Notwithstanding the difficult business environment in Jamaica, you have turned a fledgling idea into a profitable business and you have decided to make your business a bigger success. Over the years you have engaged financial, accounting and legal professionals to keep your enterprise out of trouble. Taxes were paid on time, employees were properly selected, and your banker was happy with your credit score.

Use of Advisers:

Continued growth will mean even greater reliance on the inputs of all your advisers. Depending on the project being undertaken, the role of lawyers will become even more important. A positive attitudinal shift must take place to position lawyers at the core of your business dealings because both your competition and the end user of your products and or services are may be less forgiving of errors or mistakes and initiate suits and or actions against your company.

Litigation by Default and Wasted Time:

Your company may be sued over a simple error. In a situation where a competitor is involved, they may opt to sue instead of sorting out the situation through negotiation. Dealing with the litigation process can consume an enormous amount of time, which could otherwise be spent on activities critical to the mission of your enterprise.

Depending on the situation, personnel at all levels of the company may be asked to give witness statements, make depositions, answer interrogatories, provide affidavits, search and produce documents in the evidence gathering stage of  proceedings, attend court mandated mediation and arbitration sessions, and ultimately appear in court proceedings. Bottom-line, your competition has successfully placed you at a competitive disadvantage by consuming your time in litigation that could otherwise be spent on managing the company.

Wasted Financial Resources:

A considerable amount of financial resources may have to be diverted to fending off legal challenges. Of course, you could settle out of a sinking fund or insurance cover. But under these scenarios, financial resources are still at play. For example, the cost of your insurance may increase thereby decreasing the profit margin of the company, limiting the amount of capital available for reserves and the amount of money that you may want to set a side in a sinking fund for capital expenditures.

Damaged Brand:

Litigation, regardless of the outcome, could severely damage your reputation or brand. Imagine if you spent a “lifetime” nurturing your company and building a trusted brand. Then, all your hard work is lost when the public hears that you are a party to a lawsuit. This is not a position that you want to be in.  

Protection of Intellectual Assets:

In Jamaica, intellectual property and assets are becoming increasingly important. Failure to protect intellectual assets can be devastating to your company; namely, it could suffer lost revenues, decreased income, and unnecessary competition. Protecting intangible assets – trademark, patent, goodwill, trade secret, copyright – could ensure your continued viability as a company in a technologically driven economy.

Working with competent legal counsel at your disposal should be a priority for your company. Sound, timely and forward looking legal advice could mean the difference between stagnation and growth.

Some Possible Benefits of Legal Counsel:

Your legal team could offer a range of advice and benefits including but not limited to the following:

i.                    Create an awareness of the risk or dangers of lawsuits and litigation

ii.                  Ensure regulatory compliance

iii.                Avoidance of burdensome contract terms

iv.                Write effective employee policy manual

v.                  Fair business dealings with consumers

vi.                Protect intellectual assets- tangible and intangible

vii.              Selection of appropriate insurance cover or policies

viii.            Utilization of cost effective legal strategies

ix.                Minimization of income and other tax liabilities

x.                  Implementation of business succession strategies

xi.                Protection of trade secrets

xii.              Writing sound business contracts

xiii.            Practice compliant document storage polices

xiv.            Implementation of employee social media utilization

xv.              Position the company to expand overseas



Employee Computer and Social Media Policy:

Employers should limit or restrict employee use of computers at work to access the internet and engage in social media activities. The absence of a code of conduct at work, or a poorly written one, could mean that postings deemed defamatory could expose the employer to legal liability and responsibility for compensatory damages both in Jamaica and overseas.

Protection of Trade Secrets:

Valuable trade secrets could be copied and passed to the competition. Moreover, the employee could be the competition with the use of unprotected trade secrets. Counsel’s involvement in the protection of secrets could improve the barriers that need to be placed around trade secrets and enhance the maintenance of the competitive advantage of your company.

Tax Liability and Classification of Workers:

It is important to properly classify workers in relation to their role in a company. Misclassification of employees as consultants or independent contractors could result in the imposition of significant fines. Your company must avoid this legal trap.

Fair Dealings with Consumers:

Consumer protection laws have been strengthened along with effective enforcement policies. Businesses found to be violation of consumer protection laws can be fined serially for each violation. Apart from avoiding the potential fines, your business risks bad publicity and tainting its inherent value or goodwill and overall diminution of value in the long run. It is not unusual for companies to experience total failure as a result of bad publicity from unfair and unlawful consumer dealings.


The various scenarios and examples looked at above clearly demonstrate that a prudent business owner must employ legal counsel to protect a growing company. Further, it is important that the temptation to skimp on preventative (legal) counsel be avoided at all cost. The cost of defending one unplanned lawsuit, plus paying potential compensatory damages could be a business killer.

In the circumstances, the use of competent counsel is a must for protecting and helping your company to grow. Above all, consistent use of legal advice in Jamaica is a wise investment under all circumstances.

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