Rushing into litigation before you are ready is one of the costliest mistakes a Queensland business can make. Courts expect parties to have genuinely attempted to resolve disputes before filing. Judges can award indemnity costs against a party who litigates when they should not have — and against a party who refused a reasonable settlement offer.
But equally, failing to take the right steps before commencing proceedings can expose you to evidentiary problems, limitation period pitfalls, and strategic disadvantages that undermine what would otherwise be a strong case. Preparation matters — before the claim is filed, not after.
This guide provides a comprehensive pre-litigation checklist for Queensland businesses involved in commercial disputes. These are the steps you should take — and the questions you should answer — before you file a claim or instruct a litigation lawyer to begin proceedings.
Step 1: Clarify Your Legal Rights — What Is the Cause of Action?
Before anything else, understand precisely what legal wrong has been done to you. In commercial litigation, common causes of action include:
- Breach of contract — a party has failed to perform a contractual obligation
- Misleading and deceptive conduct — under the Australian Consumer Law (s 18 ACL) or at common law
- Negligence — a duty of care was owed, breached, and loss resulted
- Breach of fiduciary duty — a director, trustee, or partner failed their duty of loyalty or good faith
- Statutory claim — breach of a specific statute (e.g., the Corporations Act, the Competition and Consumer Act)
- Debt recovery — money owing and not paid
- Unjust enrichment / quantum meruit — where no valid contract exists but work was performed or goods supplied
Identifying the cause of action is not just a formality. It determines what you need to prove, what remedies are available, what limitation period applies, and which court has jurisdiction. See our guide on Commercial Litigation in Brisbane for an overview of how disputes are resolved in Queensland courts.
Step 2: Check the Limitation Period — Do Not Skip This
This step is non-negotiable and must be done before anything else. If you miss the limitation period deadline, your claim is gone — regardless of its merits.
Key deadlines under the Limitation of Actions Act 1974 (Qld):
- Breach of contract (simple contract): 6 years from the date of breach
- Contract executed as a deed: 12 years
- Tort (negligence, misleading conduct, conversion): 6 years
- Enforcement of a court judgment: 12 years
Also check your contract — there may be a shorter contractual limitation period. And review your correspondence — a written acknowledgment of debt or part payment may have reset the clock in your favour. If you are at all uncertain, get legal advice on the limitation position before anything else.
Step 3: Preserve Evidence — Issue a Litigation Hold
Once a dispute crystallises, you have a duty to preserve relevant documents and records. Destroying or failing to preserve documents after you have reason to believe litigation may occur can result in adverse inferences against you at trial and potential sanctions for spoliation of evidence.
Take these steps immediately:
- Issue a litigation hold internally — instruct relevant staff not to delete, move, or alter emails, documents, or records related to the dispute
- Back up key electronic records (emails, contracts, purchase orders, invoices, internal reports)
- Preserve physical documents, correspondence, and contemporaneous notes
- Identify potential witnesses and brief them while their recollections are fresh
- Photograph or preserve physical evidence (defective goods, damaged work, affected property, site conditions)
Step 4: Gather Your Documentation
Before instructing a lawyer, collate the key documents underpinning your claim. A well-organised file saves significant legal costs and accelerates the early stages of any proceedings. Typically you will need:
- The relevant contract — every page, all schedules, attachments, and amendments
- All correspondence related to the dispute — emails, letters, text messages, meeting notes
- Invoices, purchase orders, delivery notes, work orders, or site records
- Evidence of your loss — financial statements, business records, bank records showing reduced income or increased costs
- Any prior dispute history, settlement discussions, or earlier agreements between the parties
- Evidence of steps taken to mitigate your loss
Step 5: Quantify Your Loss
Courts do not award vague or estimated losses. You need to prove your loss with evidence and calculate it with reasonable precision. Ask yourself:
- What is the total amount of your claim, broken down by head of loss?
- Can you substantiate each component with documentary evidence?
- Have you taken reasonable steps to mitigate your loss? A failure to mitigate can reduce or eliminate a damages award.
- Are there consequential losses — lost profits, wasted expenditure, third-party costs — that need to be separately identified and proved?
In complex commercial disputes, expert evidence from an accountant, valuer, or industry expert may be required to prove loss. Identifying this need early — rather than months into litigation — will save substantial cost and delay.
Step 6: Send a Formal Letter of Demand
A formal letter of demand is a standard and important pre-litigation step. It:
- Puts the other party on formal notice of your claim
- Sets out the legal basis for the claim and the amount sought
- Provides a reasonable time to pay or respond (typically 7–14 days for urgent debt matters; 28 days for more complex claims)
- Demonstrates to the court that you attempted to resolve the matter before litigating
- Frequently triggers settlement negotiations that avoid proceedings altogether
A letter of demand sent by a solicitor carries considerably more weight than a demand from the client. For practical guidance on drafting an effective demand, see our article on how to write a letter of demand in Queensland.
Step 7: Consider Whether Urgent Interim Relief Is Needed
In some cases, waiting for a trial is not an option. If there is a real risk that:
- Assets will be dissipated or moved before judgment — consider a freezing order (Mareva injunction)
- Confidential information or trade secrets will be misused — consider a confidentiality injunction
- Irreparable harm will occur before the matter is heard — consider an interlocutory injunction
- Evidence may be concealed or destroyed — consider a search order (Anton Piller order)
These applications must be made urgently — sometimes on the same day a dispute emerges, without notice to the other side. For an overview of the available options, see our commercial litigation guide on injunctions and freezing orders.
Step 8: Assess the Other Party’s Capacity to Pay
Winning a judgment is only valuable if the other party can satisfy it. Before committing significant resources to litigation, assess:
- Is the other party solvent? (Check ASIC for corporate history, the PPSR for security interests, and court records for other litigation)
- Do they hold assets in Queensland that can be enforced against — real property, bank accounts, trade debtors?
- Are they a shell company or special purpose vehicle with no meaningful assets?
- Is there a guarantor, related entity, or individual director who could be joined to the proceedings?
This is a commercially critical step. If the debtor is insolvent or heading that way, different pathways — including statutory demands and winding up applications — may be faster and more effective than obtaining a judgment you cannot enforce.
Step 9: Understand and Budget for Legal Costs
Queensland commercial litigation is expensive. Before commencing proceedings, have an honest conversation with your lawyer about:
- Legal costs at each stage: Filing, interlocutory applications, discovery, mediation, trial
- Party/party costs recovery: Even if you win, you will typically recover only 60–70% of your actual legal costs from the other side
- Calderbank offers: If the defendant made a formal offer to settle that you rejected and you then failed to beat that offer at trial, you may be liable for their costs from the date of the offer on an indemnity basis
- Proportionality: Is the amount in dispute proportionate to the cost of pursuing it? A $50,000 claim that costs $80,000 to litigate is rarely a good commercial outcome, even if you win
Step 10: Consider Alternative Dispute Resolution First
Before filing, consider whether mediation or arbitration could resolve the dispute faster and more cost-effectively. Many commercial contracts include ADR clauses requiring mediation before litigation. Courts — including the Queensland Supreme Court — increasingly expect parties to have genuinely engaged in ADR before filing.
Mediation typically costs a fraction of litigation and resolves the majority of commercial disputes that engage in the process seriously. A skilled mediator can identify solutions that litigation cannot provide — commercial arrangements, apologies, future business — that a judge has no power to order.
For more on when mediation works and how to approach it strategically, see our article on the role of mediation in resolving business disputes.
Pre-Litigation Checklist Summary
| Step | Action | Priority |
|---|---|---|
| 1 | Identify the legal cause of action and remedies available | Critical |
| 2 | Check the limitation period — calculate the deadline and calendar it | Critical |
| 3 | Issue a litigation hold — preserve all relevant evidence | Urgent |
| 4 | Gather all documents (contract, correspondence, invoices, records) | High |
| 5 | Quantify loss with documentary support — identify expert evidence needs | High |
| 6 | Send a formal letter of demand with a reasonable response period | High |
| 7 | Assess whether urgent interlocutory relief is needed | Urgent (if applicable) |
| 8 | Assess the other party’s solvency and asset position | High |
| 9 | Understand and budget for legal costs at each stage | Important |
| 10 | Consider mediation or other ADR options before filing | Important |
How Boss Lawyers Can Help
Boss Lawyers advises Queensland businesses at every stage of commercial disputes — from the first letter of demand through to interlocutory applications, trial, and enforcement. We bring a strategic commercial perspective to litigation: every step we recommend serves a purpose, and we are direct with clients about the costs, risks, and realistic prospects of their case.
We do not encourage litigation for its own sake. We help businesses make informed decisions about whether to sue, when to settle, and how to position themselves to achieve the best outcome — in or out of court.
If you are facing a commercial dispute and want to understand your position before you commit to proceedings, contact Boss Lawyers on 1300 267 711 or visit our Commercial Litigation page. We serve businesses and directors throughout Brisbane and South East Queensland.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances. Boss Lawyers Pty Ltd | Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000 | 1300 267 711 | ABN 38 143 136 645.
