Being sued is every business owner’s worst nightmare. Be prepared before it happens.
Litigation is scary, time-consuming and expensive. Needless to say, it’s best to avoid it if you can. But even if you are sued – or receive a notice that you are about to be – there are ways to protect yourself and your business.
It’s kept nearly every business owner up at night: being served with notice that you’re being sued. But if you find yourself in this situation, try not to panic – lots of businesses deal with this at one point or another, and there are steps you can take to protect yourself even after the suit has been filed. The exact plan of action depends on a number of factors, including the nature of the claim and the court where it was filed, but here’s a good high-level summary of steps you should take as soon as you can:
- SEEK LEGAL COUNSEL! Seeking prompt legal advice is crucial. The company’s legal team or an outside firm experienced in litigation should be engaged immediately to guide the company through the process.
- Understanding the complaint: The company must thoroughly review and understand the allegations, the identity and motivations of the plaintiff, and the potential legal and financial ramifications.
- Responding to the complaint: The company needs to prepare a timely and appropriate response or answer to the complaint within the statutory deadline.
- Document preservation and collection: Implement a litigation hold to preserve all relevant documents and information, including digital data, that might be required for discovery or as evidence.
- Assessment of the case: Analyze the merits of the case, the strength of the evidence, the legal claims, and possible defenses. This sets the stage for the company’s litigation strategy.
- Costs and resource allocation: Consider the immediate and future costs associated with the lawsuit, including potential judgments, settlements, attorney fees, and internal resource allocations.
- Insurance notification: Determine whether the company has insurance policies that may cover the lawsuit and ensure timely notification to avoid jeopardizing coverage.
- Business operations: Assess how the lawsuit may affect ongoing business operations and what measures can be put in place to minimize disruption.
- Public relations and communications: Manage communication about the lawsuit to protect the company’s reputation. It may be necessary to develop a public relations plan to address stakeholder concerns proactively.
- Risk management: Evaluate the risks that the litigation poses to the company, including financial exposure, reputational harm, and operational impacts.
- Confidentiality considerations: Protect confidential information from becoming public during the discovery process, through protective orders or confidentiality agreements if necessary.
- Settlement negotiations: Consider the prospects and timing of a settlement negotiation, taking into account potential benefits and drawbacks.
- Corporate compliance and policy review: Explore whether the lawsuit has implications for the company’s compliance policies and practices, and whether those need be revised.
- Litigation strategy: Develop a litigation strategy, including decisions about jury trial vs. judge trial, choice of legal arguments, and potential witnesses.
- Employee management: Determine how to handle employees who may be implicated in the suit or are needed as witnesses, considering both their legal protection and the potential impact on their job performance.
- Future prevention: Plan for future preventive strategies and perhaps compliance training sessions for employees to mitigate the risk of similar lawsuits.
- International considerations: In the case of international litigation or parties, consider the implications of jurisdiction, choice of law, and potential cross-border legal coordination.
Each lawsuit is unique and dictates its own specific roadmap of defense and strategy, which must be handled carefully to protect a company’s interests. But the one piece of advice that applies universally is to consult with your attorney immediately. They can assess the situation objectively and guide you through the process, hopefully to a speedy and satisfactory resolution.
Whether you’re facing an active lawsuit, concerned about a brewing dispute, or just want to prepare for all eventualities, book an exploratory call with us and let us help you protect yourself and your company.