My business is being sued, now what? That’s a question no business owner wants to ask, but people sue businesses every day. Regardless of whether the suit is frivolous or well-grounded, small or large, the business owner on the defensive needs to know how to respond without making their position even worse. In short, you need to hire a lawyer, gather all documentation relevant to the suit, and decide on the right strategy.
Contact a Business/Civil Litigation Attorney
Never ignore a court summons related to a suit. If you do not file an Answer, the judge may rule in favor of the complainant. Well before your court date, and as soon as possible after learning of the suit, you should contact and retain an attorney.
Contact an attorney with experience handling suits against businesses and who has experience with the relevant type of case. Aside from many cases that go to small claims court, do not try to defend yourself and/or your business from a suit.
Gather Documentation for your Business Attorney
The business lawyer will need a great deal of information relevant to the case. The specifics may vary according to the type of case, but some documents are always important:
- Complaint including all exhibits;
- Letters from the complainant and their law firm;
- Written statement to only your attorney regarding your position in the case;
- Take photographs of the accident, the work that is in dispute, et cetera;
- Gather the names and contact information of witnesses and other individuals with information; and
- Insurance policies, including the detailed descriptions of your coverage.
Share Everything with your Business Lawyer
If the case involves personal injury, you will certainly want to share your insurance information with your lawyer. If the case involves non-performance or breach of contract, you want to share documents concerning the work performed, the customer’s specifications, the contract, and anything else related to the work. Videos and photos related to incident are critical in some cases and should be shared along with other documentation about the incident.
Determine whether the Business Lawsuit is Covered by Insurance
Your insurance company may not cover the claim, but you should still discuss the case with your insurance agent. Investigate the claim that forms the basis of their suit. This can be useful for your defense regardless of the type of suit or state laws. In some cases, you will have the legal obligation to investigate. A sexual harassment suit or personal injury claim may obligate the business to investigate what happened.
Strategize with your Business Lawyer about the Best Way to Proceed Forward
A loss in court can be very expensive. It makes sense to determine the likely cost could be in the event you lose the lawsuit. In addition to paying for damages to make the complainant whole, you could also be held responsible to pay the following:
- the attorney’s fees and costs of the other party;
- statutory damages;
- punitive damages which are in some cases millions of dollars; and
- to personally pay all of the above with your personal assets even if these assets are in no way related to your business.
Additionally, if a Court finds in favor of the other party, a Court will enter a judgment against you. A judgment will negatively affect your credit and could result in wage garnishment, levy against bank accounts, foreclosure proceedings, amongst other remedies available to the creditor.
With experienced counsel, Many cases are properly dismissed at the onset of a case for failing to state a claim for relief, the claim is no longer actionable as the incident(s) in question occurred outside the statute of limitations, amongst other defenses available to business owners.
No one likes to admit defeat, but as a business owner you need to look at your ongoing defense as a financial decision. The nature of the other side’s claim and your own calculation of the costs of settling versus fighting should determine whether to settle or to go to court. Cases can be settled at anytime and many cases are resolved at summary judgment without having a trial on the case.
Have an Experienced Business Attorney on Your Side
If an individual or company is suing your business, contact Gilbert Alden PLLC, a Burnsville/Apple Valley law firm, to discuss your case.