No one ever wants a to be sued, but unfortunately, there is even a greater possibility of facing a lawsuit if you own a small business. You may find yourself being sued by an employee, a vendor, a client, or even another business and are likely to feel overwhelmed and concerned that the suit will end up costing you more than you can afford, even if you win. If your business is being sued, there are a few steps to take to make the process go more smoothly and help you prepare for the best possible outcome.
Meet with an attorney to review the case
One of the first things that you need to do is go over all of the lawsuit papers thoroughly with a lawyer experienced in business law. This includes checking even the contact information such as the address, business name, etc. If this information is incorrect, you may have a reason to have the action dismissed entirely. After verifying this information, you will need to review each of the alleged allegations and issue a preservation order to make sure that you retain all data that may be pertinent to the suit.
Avoid communication directly with the person or entity filing suit
Once a lawsuit is filed, never try to contact the plaintiff directly. All communication should go through attorneys as anything that is said can be used in determining the outcome of a lawsuit. Even if you think the situation can be settled without going to court, have this communicated through your attorney, so you make sure that nothing you say negatively affects the outcome.
Inform your insurance provider of the suit
Many types of business insurance will cover specific issues such as lawsuits depending on the circumstance. These can fall under general liability, workers compensation, or professional liability policies and may cover damages to the plaintiff, attorney fees, or both up to a certain limit. If you are unsure as to whether or not your current policy provides you with coverage, contact you, insurance provider, as soon as possible. There may be specific procedures to follow, so it is crucial to contact them early in the process.
Determine how you wish to respond to the complaint
After receiving a lawsuit, it will b expected for you to submit a written response before the given deadline, which is often 30 days. Your submission will include whether you admit to or deny one or all of the allegations, a list of any counter or cross-claims you have against the plaintiff or other defendants, and whether you wish to proceed to trial or consider other forms of resolution. Other forms of resolution could be:
- Arbitration or mediation
- An agreed-upon out-of-court settlement
Before you draft your response, you should develop a plan with your attorney to determine the best strategy for your case and the pros and cons of each outcome. This will help you determine which option will work best to help achieve your desired resolution, and expose you the least if the resolution is not in your favor. An attorney will not only be able to help you identify possible counterclaims, but may also be able to advise you on if there is a chance to request dismissal of part or all of the suit without having to provide an answer. Whatever you do, never ignore the complaint. If you do not respond by the deadline, it could result in a default judgment against you.
Don’t try to cover anything up
There is an old saying in the law: The truth will come out. Always be completely honest with your attorney. They can help you deal with anything as long as they know about it in advance. The truth of the matter will come out sooner or later, and it is easier to get a handle on problems and be prepared for them when they don’t come as a surprise.
Follow the steps above to prepare yourself for your lawsuit better and help achieve the best possible outcome. In the event your business is sued, one of the most crucial steps is finding an experienced business attorney who can help you towards the best resolution, whether it is agreeing to a settlement, or taking a case to trial.