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Getting sued is one of the most stressful situations a business owner might face. Whether it is a customer, employee, competitor, or vendor that is putting a lawsuit against you, this situation is always bad news. Luckily, you have established a preference for actions that protect your business and address the situation in an orderly way.
What All Businesses Have to Do When They Have Been Sued?
1. Be Calm and Read the Complaint
The first thing to read carefully is the summons or complaint that the plaintiff submitted. This document states who is suing you, for what reasons, and what remedy the complainant is asking for. Don’t panic or make assumptions—understanding the claims is critical to preparing your response.
2. Do Not Ignore the Lawsuit
A lawsuit that is unresponded to ends up with a default judgment being pronounced against you and in favor of the other party. Keep track of the deadlines; most lawsuits have a time frame within which a responding party must act.
3. Seek Legal Counsel Immediately
Business litigation is rather complex, and experienced legal assistance is essential. An attorney can analyze the claims against you, prepare a response, and advocate for you during negotiations or in court. A good attorney can also help you analyze the possibility of settlement, assuming it is the most appropriate direction to take.
4. Collect All Relevant Documents and Evidence
Secure contracts, emails, invoices, employee records, or any other documents that are likely relevant to the dispute. This will be particularly useful evidence for your attorney to fortify your defense strategy and evaluate the strength of the opposing claims.
5. Do Not Speak to the Plaintiff
This might be very hard, but it might be too tempting to call the other party suing you. Don’t do it, as it can only hurt your case: anything you say could be twisted or used against you. Let your lawyer handle all communications related to the case.
6. Review Your Insurance Coverage
Check whether your business insurance policy provides coverage for the type of claim you are facing. General liability, professional liability, or employment practices liability insurance may assist with legal fees and settlement amounts.
This post was written by Trey Wright, a Pensacola Bankruptcy Lawyer! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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