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Defining “Industry Standards” in Business Litigation

William B. Hanley, Attorney At Law May 8, 2024

Business litigation isn't merely about legal battles—it's about upholding standards that define fairness in dispute resolution. Think of industry standards as the guiding lights that create the rules and customs we follow during legal issues. By understanding these standards, you can be empowered to navigate the legal arena with precision and integrity. 

What Are Industry Standards in Business Litigation? 

Industry standards in business litigation refer to the codified norms, guidelines, and practices that are accepted within a particular sector. These standards play a pivotal role in legal disputes by providing a framework against which the actions and decisions of businesses can be judged. Essentially, they serve as a measure of conduct for companies, helping to determine what is deemed reasonable or customary in specific circumstances or fields of operation.  

In litigation, industry standards help courts and arbitration panels gauge whether a party's actions deviate from what is considered acceptable by their industry peers. This can influence decisions on issues ranging from contract disputes to allegations of negligence or misconduct. For businesses, adhering to these standards is crucial, not only to avoid legal pitfalls but also to maintain credibility and uphold best practices within their industry. 

How to Leverage Industry Standards in Your Case

In legal disputes, industry standards can serve as a critical reference point for judges and juries. This is especially relevant in cases of breach of contract, negligence, malpractice, and intellectual property disputes. Industry standards can influence the interpretation of contracts, the assessment of damages, and the determination of liability. 

  1. Expert Testimony: Engaging experts who are well-versed in your industry's standards can provide your case with the credibility and clarity it needs. These professionals can offer detailed insights into how the standards apply to the specifics of your case and where the opposing party may have deviated from these benchmarks. 

  1. Documentation: Proving adherence to or violation of industry standards often requires substantial documentation. This can include policies, procedures, training materials, and records of compliance. Ensuring that your business maintains meticulous records can be beneficial in demonstrating your commitment to upholding these standards. 

  1. Understanding the Evolution of Standards: Industry standards are not static; they evolve to reflect changes in technology, regulation, and best practices. Staying informed about the current standards relevant to your industry is essential, both for compliance in your operations and for fortifying your position in litigation. 

By effectively leveraging industry standards, businesses can not only protect themselves in legal disputes but also reinforce their commitment to operating with integrity and excellence. Engaging the help of a seasoned business attorney, such as William B. Hanley, Attorney At Law, can also help businesses understand their legal rights and responsibilities.

Recognizing Industry Standards 

Understanding industry standards is crucial for navigating business operations and litigation. These standards and guidelines set the bar for professional conduct and operational procedures. They provide a reference point for evaluating a business's practices based on legal requirements and industry expectations. 

Some of the key areas where industry standards apply include: 

  • Safety and Quality Control: Ensuring products and services meet certain safety and quality requirements to protect consumers and uphold brand integrity. 

  • Regulatory Compliance: Adhering to laws and regulations that govern industry operations, such as environmental protections and financial reporting standards. 

  • Ethical Practices: Maintaining ethical standards in business dealings, including transparency, fairness, and respect for stakeholder rights. 

  • Technical Specifications: Following technical specifications and protocols, especially in fields such as engineering, IT, and manufacturing, to ensure interoperability, safety, and efficiency. 

These standards are typically established by professional associations, regulatory agencies, and sometimes through legislation, encapsulating the best practices agreed upon by industry stakeholders. Recognizing and adhering to these standards is not only essential for legal compliance and avoiding disputes but also for preserving a company's reputation and ensuring its longevity. 

Product Liability Standards 

  • Manufacturing Practices: Industries often have established manufacturing standards that outline acceptable processes for producing goods. In cases of product liability, adherence to these standards can serve as a defense against claims of defective products. 

  • Safety Regulations: Industries may also have specific safety regulations governing the design and production of products. Compliance with these regulations can be crucial when defending against claims of negligence in product design or manufacture. 

  • Labeling and Warning Standards: Businesses are often required to adhere to industry standards regarding product labeling and warnings. Failure to meet these standards can result in liability for injuries caused by inadequate warnings or instructions. 

Financial Industry Standards

  • Accounting Practices: The financial industry operates under established accounting standards, such as the generally accepted accounting principles (GAAP). Adhering to these standards is essential in financial disputes, as deviations may indicate misconduct or misrepresentation. 

  • Investment Practices: Investment firms are typically expected to adhere to industry standards regarding due diligence, risk assessment, and fiduciary duty. Departures from these standards may lead to allegations of security fraud or breach of fiduciary duty. 

  • Compliance Regulations: Businesses in the financial industry must comply with the regulations set forth by governing bodies like the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). Failure to meet these regulatory standards can result in legal repercussions. 

Construction Industry Standards

  • Building Codes and Regulations: The construction industry is subject to building codes and regulations that dictate acceptable construction practices, materials, and safety standards. Non-compliance with these standards can result in legal disputes over construction defects or building code violations. 

  • Contractual Standards: Contracts within the construction industry often establish standards for project timelines, quality of work, and adherence to specifications. Disputes may arise if one party fails to meet these contractual standards, leading to claims of breach of contract or construction defects. 

  • Safety Protocols: Construction companies are expected to adhere to industry standards for workplace safety, such as those outlined by the Occupational Safety and Health Administration (OSHA). Violations of safety protocols can result in legal liability for injuries or fatalities that occur on construction sites. 

Healthcare Industry Standards

  • Medical Practices: Healthcare providers are expected to adhere to industry standards of care, which outline the level of care and treatment that patients should receive. Deviations from these standards can result in medical malpractice claims. 

  • Patient Privacy Regulations: Healthcare organizations must comply with industry standards and regulations regarding patient privacy, such as the Health Insurance Portability and Accountability Act (HIPAA). Failure to safeguard patient information can lead to legal penalties and lawsuits. 

  • Licensing and Credentialing Standards: Healthcare professionals are required to meet certain licensing and credential standards to practice within their respective fields. Challenges to these standards may arise in cases involving allegations of professional misconduct or incompetence. 

These standards are commonly set by professional associations, regulatory bodies, and sometimes by legislation, reflecting the collective agreement on the best practices that should govern certain industry activities. Understanding these standards is not only critical for legal compliance but also serves as a foundation for maintaining the integrity and quality of services offered within any field. 

Understand Your Options

If you're involved in a business litigation matter, consulting with an attorney who has experience in your industry and an understanding of its standards is crucial. Legal professionals like William B. Hanley can provide the guidance and representation needed to make sure your business's interests are protected through every phase of the litigation process. Reach out to him today for support.