Definition
Litigation Risk is the possibility that Decisions, actions, Contracts or unfulfilled obligations will lead to court proceedings or another formal dispute.
Human Explanation
It assesses whether a situation may develop into a formal dispute requiring legal resolution.
Why it Matters
Early assessment supports preventive action, informed negotiation and preparation for potential consequences.
Conceptual Boundary
Litigation Risk does not mean proceedings will occur and is not the same as predicting their outcome.
Practical Perspective
Where exposure is material, consider negotiation, Mediation, evidence preservation and qualified legal advice before acting.