Being sued can trigger panic. Getting served with a summons is the last thing a business-owner or senior management wants. But knowing what to do when your business faces a lawsuit can make all the difference. If your business takes early and critical steps — understand the allegations, secure legal representation, and safeguard your assets — you can be fully prepared to properly respond and protect your business. Davis Business Law wants to help your company develop and implement a composed and strategic defense to any lawsuit that comes your way.
Key Takeaways
- Contact a business litigation attorney immediately after receiving a summons to ensure a strategic legal response to the lawsuit and to avoid inadvertent missteps when sued that could worsen the situation.
- Promptly notify your insurance company about the lawsuit to check if defense costs and damages are covered under your policy and to potentially aid in settlement negotiations.
- Your company must preserve all relevant evidence as soon as a lawsuit is anticipated or initiated, as this is not only a legal obligation but also crucial for a strong defense.
Understanding the Lawsuit
You will typically find out about a lawsuit against your company when you get served a summons with a petition or complaint attached. This document contains the plaintiff’s initial claims and demands for damages – basically what the plaintiff thinks your company did wrong and how much money they want to be made whole.
Legal jargon and the wording of claims can be complex. Some complaints or petitions are dozens of pages long with hundreds of numbered paragraphs. Plaintiff’s attorneys love to load complaints with multiple claims and defendants to increase their chances of something sticking and jack up their settlement demands. Interpreting this complex legal terminology and analyzing detailed allegations when sued are often outside the wheelhouse of most businesses.
In these situations, your company needs the wisdom and guidance from an experienced business attorney who can help you understand the claims against your business, defenses you have, how much money is at stake, and what your risk level is.
Immediate Actions to Take
Photo by Debby Hudson on Unsplash
In the wake of a lawsuit, your early choices can either lay the groundwork for a solid defense or expose your business to greater risks, if handled poorly. For example, sometimes companies will hire us long after they are sued and only after they have already received a default judgment against them. “This lawsuit is stupid,” they say, “I’ll ignore it.” The next thing they know, the company lost the lawsuit without having the opportunity to put up a fight, and the winner is trying to garnish their wages and sell their property. Don’t be that company owner.
Being sued is important and must be dealt with. Time is of the essence. Any inactivity or errors from owners or senior management have the potential to inflict enduring damage upon your business.
Contact a Litigation Attorney
At the earliest opportunity, it is imperative to get in touch with a litigation attorney as soon as your company is sued. This move isn’t an indication of culpability or admission of guilt, but rather a necessary measure to fiercely safeguard your company’s interests. Your chosen advocate will represent you by devising defense strategies, preparing an answer, and helping you evade errors that might otherwise result in a default judgment.
In your first meeting, your attorney will ask probing questions to understand your situation, including about other businesses you may be involved with or other lawsuits you may have faced. Choosing an attorney means more than simply securing legal defense – it equates to finding a partner who learns your business and escorts you through each step of litigation. They’ll help navigate around the dangers inherent in litigation processes where things such as inadvertent document destruction or discussing the case with other people can be ruinous.
Your lawyer serves as advocate and strategic planner and retaining counsel is ultimately your most reliable chance for maintaining normal business operations when sued. If you build a preemptive relationship with a attorney, general advice about avoiding lawsuits can also be very helpful.
Notify Your Insurance Company
As you prepare to defend the lawsuit, another critical ally may be your insurance company. It’s essential to notify your insurer promptly of any lawsuits, as they may shoulder the burden of defense costs if the claim is covered. And if your insurance company denies your claim, contact a business attorney to look at your policy. Maybe you can challenge the denial and still seek insurance coverage.
Should the need arise, our attorneys at Davis Business Law are adept at deciphering insurance legalese, offering insights into whether your current policy suffices, or if additional coverage is warranted. Call us before you are sued to discuss your insurance policies and make sure you have the right policies to cover different types of business lawsuits. After all, you’ve paid those premiums for a reason, and you don’t want to pay higher prices in the future.
Preserve Relevant Documents and Evidence
In today’s electronic age, where information is everywhere and communicated and stored in so many different ways, holding onto documents and evidence can be very complicated. It’s also a legal requirement when sued. The moment your business is aware of impending litigation an obligation begins to preserve any data that could be relevant to the case. Protected information encompasses:
- e-mail and texts;
- contracts and drafts;
- calendars, notes, and anything handwritten;
- social media posts or conversations;
- documents relating to employees or customers;
- anything in which you respond to or discuss the other side to the lawsuit;
- as well as any many other additional records specific to the involved lawsuit.
It may be tempting when your business is sued to discard or hide such materials. Don’t! Destroying evidence could have catastrophic consequences for your case. Hire a business attorney to review the documents and advise you about what qualifies as pertinent evidence.
Navigating the Legal Process
Litigation is definitely not a sprint. It’s a marathon – sometimes lasting years – that spans multiple phases. Each phase, like pleadings or discovery, serves as its own important battle ground as you seek justice. Department-heads and other senior management in your business should be told what to expect during litigation, including of their duty to preserve documents and that they may be witnesses at depositions or trial.
Filing an Answer
The answer is the first pivotal legal document when responding to the plaintiff’s complaint or petition. It can be changed later, but it serves as a comprehensive rebuttal that defines your initial defense strategy. You answer can also present an avenue for asserting affirmative defenses or counter-claims.
Instead of filing an answer, if your business attorney thinks it wise, you may also be able to pursue dismissing the case without needing to answer it. Courts don’t favor dismissal, but it can be necessary sometimes, especially if the other side messed something up when their wrote, filed, or served, their complaint.
Discovery Phase
The discovery phase is a crucial period of information gathering, where both sides ask each other for documents, the answers to written questions, and take depositions – which is questioning witnesses under oath in front of a court reporter who makes a written record. The discovery process can illuminate the strengths and weaknesses of each party’s case and can control its outcome. The duration of this phase can be long, often stretching over several months or more.
Settlement Discussions
Settlement discussions should always be part of the process, from the very beginning, all the way to trial. You can even settle a case while the jury is deliberating. Settlement discussions can be delicate, requiring a nuanced understanding of the law, the strength of your case, and the interests at stake. A purposeful mediation can be a useful part of the settlement process. Negotiations are a balancing act, negotiating terms that promote economic justice while mitigating the costs and risks of prolonged litigation.
What Does Trial Look Like?
The trial typically begins with pre-trial preparations, where you and your legal team gather evidence, review legal arguments, and strategize your defense. This stage is critical as it sets the foundation for your case.
Once in court, the trial commences with opening statements from both sides. Following opening statements, the plaintiff presents their case first. They may call witnesses, introduce documents, and present other evidence to support their claims. Your legal team has the chance to cross-examine these witnesses and challenge their evidence. After the plaintiff rests their case, it’s your turn to present your evidence and witnesses. This is your opportunity to refute the plaintiff’s claims and present your version of events. Your legal team will carefully select evidence and witnesses to support your defense strategy.
Throughout the trial, both sides engage in vigorous legal arguments, interpreting the law and applying legal principles to the facts of the case. These arguments aim to persuade the judge or jury to rule in your favor.
Once closing arguments conclude, the decision-maker(s) deliberate and reach a verdict – they have monopoly power over the outcome. If the trial is before a jury, they will deliberate in private. If it’s before a judge, the district court judge will issue a verdict after considering all the evidence and legal arguments presented.
Contact Davis Business Law If Your Business Is Sued.
If your business becomes involved in litigation, securing a legal team that is both highly skilled and fully dedicated to your success is crucial. Davis Business Law recognizes what’s at stake for you, and our approach combines zealous representation with seasoned knowledge. Navigating lawsuits can seem overwhelming but it can become much more manageable when armed with superior legal counsel. Call us today to discuss your case.
Frequently Asked Questions
What should I do first if my business is sued?
Should your company face a lawsuit, it is critical to promptly review the complaint in detail, grasping all claims and pertinent deadlines. Immediately seek counsel from a litigation attorney for representation and advice, while also informing your insurance provider about the lawsuit to see if it falls within the scope of your policy coverage.
Can I communicate directly with the plaintiff or their attorney?
No. It is advisable not to engage in direct conversations with the plaintiff or their legal counsel to prevent any possible adverse legal consequences for your business. Your litigation attorney should manage all communications. Discuss the case with your attorney.
What happens if I ignore a lawsuit?
Ignoring lawsuits can result in a default judgment against you, leading to serious consequences such as property foreclosure and bank account freezing.
It’s crucial to address any legal action promptly.
Is it necessary to preserve all documents and evidence related to the lawsuit?
Certainly, maintaining all documents, contracts, and evidence pertinent to the lawsuit is both a legal obligation and crucial for your defense strategy.