Any business can be sued at any time. It’s part of our legal system. An unhappy customer, a supplier, someone claiming he or she got hurt at your location or by your product, another business complaining about competition, even the government, are all potential plaintiffs against you. Getting sued is a scary thought but it can be made easier by knowing what to do when it happens.
Before You Are Sued
Often, but not always, before being sued you’ll get a demand letter. It comes from someone complaining about something and asking you for corrective action. The demand is not a lawsuit. Consult your lawyer promptly about the demand letter and decide how to respond. You may be able to show the writer that you did nothing wrong, or you may be able to reach a settlement. By these steps you can possibly avoid being sued.
The Formal Complaint
If the matter isn’t resolved through a demand letter or settlement, you’ll receive a formal complaint. It may be handed to you personally, delivered by a sheriff or other person, mailed to your company or given to whoever your company listed as “agent for service of process.” With the complaint is a “summons.” These tell you that you’ve been sued, state the claims being made, tell you how long you have to respond, and identify the court.
A lawsuit usually doesn’t move forward until you receive the complaint. Some people who know a lawsuit is coming try to evade the process server. Usually this is wasted effort. Today’s technology helps sheriffs and process servers find you. If they can’t, the court lets plaintiffs use a substitute method, like placing a notice of the lawsuit in a newspaper, and treating that as if you received the complaint. So usually (not always) it’s easier to just receive the complaint and then take steps to defend the claim. Talk to your lawyer about whether, for you, it is better to receive the complaint or delay letting yourself be served.
Review the Papers Promptly
Only a short time is allowed to respond to the complaint: 20–30 days in most courts. Sometimes a hearing is set faster, maybe as soon as 3–10 days. Your lawyer needs to use this time to learn the facts and prepare a response. So don’t set the complaint aside. Read it to get an idea what the claim is about, and find out how soon you must respond.
Often, people read the complaint, see the claims are false, and decide for this reason not to take it seriously. The problem is the court or judge doesn’t know which side to believe. No matter how untrue the claims, you must take the complaint seriously and respond. If you don’t, the court will find you in “default” and rule against you.
Contact Your Lawyer
Call and give the papers to your lawyer right away. The faster you do this, the more time your lawyer has to learn the facts, gather information, interview witnesses, and decide strategy with you. Tell your lawyer everything, even if it’s embarrassing. Your lawyer can provide you the best defense by knowing the weaknesses of your case as well as the strengths. Keeping secrets from your lawyer creates risk the other side will present the bad facts, and by then your lawyer won’t be able to defend them.
Check Insurance
Defending a lawsuit can be expensive due to court costs, investigation costs and legal fees. Depending on the kind of claims, your insurance company may pay or help pay for your defense, settle the claim and even pay any award against you. Check your business and homeowner’s insurance. Check your current and even old policies. See if you are covered by insurance of a trade association, your landlord, or policies bought by suppliers, vendors or others that may name your company as an insured. Talk with your lawyer and insurance agent about what insurance you have, so you can get help defending and resolving the claim. Do this fast because policies require that the insurance company be notified promptly, otherwise they aren’t obligated to help.
Don’t Discuss It With Anyone Else
Generally it’s a good idea not to discuss the lawsuit with other people, like business associates, reporters, or even friends, unless your lawyer says it’s okay. Things you say can be used against you. Information you reveal may find its way to your opponent where they can use it. You may be forced to testify about what you said to friends. So it's best to limit your conversations on the lawsuit to things your lawyer says are permissible to discuss, and only with people your lawyer says it’s okay to talk to.
Exception: It’s okay to discuss with your spouse, clergy or doctor. Lawsuits can be unsettling and cause anxiety. The law permits you to discuss these matters confidentially with a member of the clergy, your spouse, or your medical doctor or psychotherapist. The law says the other side cannot force you to reveal what you discussed confidentially with these people. They won’t give you legal advice, but they may help you deal with the matter.
Preserve Records
Any records that relate to the incident or dispute may be important in the case. Also, as many people know from the now famous cases of Enron and Arthur Andersen, discarding or destroying records while you are in a lawsuit may be illegal. Preserve all records, and this includes emails as well.
Consider Compromise and Settlement
When they are sued, many people want to defend and win at all costs. No matter how right you believe you are, there is already an opposing lawyer who sees things differently, and there is always a risk the judge or jury won’t see it your way. Consider the benefits to you of being willing to compromise and settle the case.
If you own and operate a business, the likelihood of being sued at some point is high. Taking these actions will help ease the tension of being sued, help you deal with the case, and help you get the best result.
Contact an attorney at Triscaro & Associates today. Please call us for all your legal needs. We offer a full range of legal services to individuals, families and businesses, including personal injury, estate planning, real estate, family law and business matters. We are dedicated to providing the highest quality legal services at a reasonable cost.