Cut Through The Red Tape

Understanding the U.S. Legal System’s Role in Due Diligence

When it comes to pre-investment due diligence, a basic understanding of the U.S. legal system can be invaluable, particularly in regard to background checks. In the event that a red flag appears on the legal section of a background check, you are better equipped to evaluate the result when you have a general sense of how the judicial system works.

In this report, we take a closer look at the U.S. judicial system and highlight the importance of its nuances in the context of your investment decision-making process.

We’re committed to your privacy. We’ll use the information you provide above to process your request and provide you with the content requested. Check our Privacy Policy.

70 million Americans have a criminal record,
with about 8 million having been incarcerated

According to Intelligo data, out of a sample of approximately 14,000 court cases found on background checks run in 2021, 76% of the subjects were defendants, whereas 17% were plaintiffs and 7% were involved as other parties. It is interesting to note that the individuals were generally defendants in the cases that appeared on their background checks.

Legal cases do not necessarily imply an adverse association with the subject of the background check

This data further stresses the importance of grasping the basics of the judicial system—to understand how and why your subject was involved in a legal case, and what it means for your investment decision, should you choose to go into business with them.

If the subject has been a defendant numerous times, what can this pattern say about the individual?

Furthermore, if the subject was a plaintiff against a former employer or a debtor in a bankruptcy case, these are important factors to consider to help you make a sound decision.

How can the subject’s involvement in a legal case impact investment decisions?

With a basic understanding of the judicial system, the difference between various kinds of cases, the types of parties, and possible outcomes, you will feel more confident reviewing the legal section of a background check. Especially when flags are involved, it’s important to recognize the bottom line—how this subject was involved in the legal case and what it means for their character, their integrity, their credibility, and their reputation. Since screening individuals for potential risk requires the utmost attention to detail, with this overview you will be able to attain the transparency that you need when considering an investment deal or business partnership.