Letter of the Law: What Should You Do If Your Business Gets Sued?

“You’ve been served.”

If one were to assemble a list of phrases capable of ruining your day, this one would definitely rank near the top.

Lawsuits can be costly in terms of time and money. They can also shift your focus away from your business, which can introduce opportunity costs.

So if one is to ascribe to the letter of the law, what should you do if your business gets sued?

Take it seriously and act immediately.

 

Contact Your Attorney

When served with a notice to appear, get in touch with your attorney right away. Your lawyer will review the summons and the case information to see if it was prepared properly. If it wasn’t, you could get the suit dismissed. Do not contact the person suing you (the plaintiff). As tempting as it might be to try to talk them down, you could wind up exacerbating their irritation.

Let the lawyers do the talking once a situation goes legal.

It is also absolutely critical to be 100 percent forthcoming in your conversations with your legal counsel—even if you have to disclose information of a personally embarrassing nature. Just as your lawyer will be working to assemble everything they can to protect you, the plaintiff’s lawyer is working to discover everything they can to attack you. Your attorney can only defend you against known threats, so disclose everything.

 

Gather Pertinent Evidence

You will be advised to collect every piece of information you have relating to the case. If you routinely shred documents or purge files as part of your business, stop at once to ensure the preservation of as much data as possible serving your case. Photos, emails, web pages, voice mail, video whatever—gather it all and get it to your lawyer as soon as possible. Expedience is your best friend when you’re being sued. The sooner you get materials to your lawyer, the more time you’ll afford them to investigate the matter and decide upon an appropriate course of action.

 

Inform Your Insurer

After contacting your lawyer, you next call should be to your insurance provider. Even if you think the suit isn’t covered under your general liability insurance quotes, it’s still a good idea to file a claim. If the case is covered, the insurance company will step in to defend you. However, they usually require you to inform them within a certain period of time, so it’s better to let them know right away and find out the situation isn’t covered than it is to delay notification only to learn you would have been covered if you’d acted sooner.

 

Keep Quiet

Being sued can be a traumatic experience, so you may feel a need to discuss it with your friends and associates. This is a bad move. Those people may be called upon to testify in court. If you’ve told them something that could hurt your case, they could be compelled to reveal it. If you really must talk to someone to ease your anxiety, your clergy member, your doctor and/or your spouse are your  only choices. These people cannot be forced to testify against you. Other than that, your lawyer is the only person with whom you should discuss the case.

 

Consider Settling or Filing a Countersuit

Sometimes, settlement can be your best course of action, even though you’re not at fault. Fighting a lawsuit is a bad time to let your ego take charge. Winning at all costs can sometimes result in just that—winning at all costs. If you’re looking at spend $80,000 to win a $10,000 case, it’s best to just pay the plaintiff to go away.

Another consideration is the countersuit. Sometimes, people file cases to obscure their liability in another area. A countersuit could bring this to light. Getting your attorney on the case early gives you an opportunity to explore all available legal means.

Above all, remain calm and rational throughout the process. Acting impulsively will do more harm than good. Taking the appropriate steps immediately will give you your best chance of coming through a lawsuit at minimal cost.

Note: While this article addresses a topic of a legal nature, it should not be construed as legal advice. Always consult an attorney for specific legal counseling.

 

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