5 Ways to Defend Your Business in a Lawsuit
Few events are more scary or frustrating for a business than being presented with a lawsuit. Suddenly, everything you’ve worked for — all the energy you’ve poured into the company — seems to be at risk.
But overreacting will not help the matter. You need to remain calm and make poised and calculated decisions.
Five Tips for Protecting Your Business
Companies are sued all the time, so you aren’t alone. Many cases brought to court are frivolous and have no legal basis, sometimes no valid facts, attached to them.
Other suits might be valid and will require strategic defense and negotiation in order for your firm to survive. Whichever’s the case, here are five tips that will help you protect your business through this process.
- Contact Your Attorney
As soon as you’re served legal papers, you should contact your attorney. Drop everything else and make the call. This is smart for several reasons.
First, talking to your attorney will enable you to start forming a plan. Depending on the type of case and the severity and accuracy of the claims, you’re going to need all the time you can get to prepare.
Second, turning your attention to your counsel keeps your focus off the plaintiff, to whom you may be tempted to reach out. Since the best response is almost always to remain tight-lipped, any distraction is a good thing.
- Get in Touch With Your Insurance Provider
The next thing you need to do is contact your insurance provider. In all likelihood, you have some policies in place to protect you against lawsuits.
Though it’s possible you have no protection, you won’t know until you file a claim. “Should the suit fall under the umbrella of what your policy covers, it’s common for your benefits to pay for attorneys’ fees, court costs and any settlement or judgment you’re found liable for paying,” says Ted Devine, a small business insurance agent.
- Respond to the Suit
Your next step is to respond to the lawsuit. You might be tempted to put it on the back burner and ignore it, but that is a very bad idea.
After you’re received notice, you typically have 30 days to respond. If you don’t respond within that timeframe, the plaintiff has the right to file a Request for Default.
This raises the chances that the plaintiff could win the case and the court will issue a judgment against your business.
- Verify That You Have the Right Attorney
Once you decide whether you’re going to pursue a settlement or trial, you might want to evaluate your current position and determine whether you have the best legal team on your side.
If a trial is in the cards, you want an attorney who has courtroom experience. “Every piece of evidence, the testimony from every witness and every legal citation must be carefully woven together to tell the compelling story that advances your case at trial,” Lichtenstein Law Group explains.
If your attorney is not skilled at creating a compelling story, you’ll have trouble defending your case.
- Keep Running Your Business
Finally, you have to continue running your company. It would be nice if you could put everything on pause to focus on the lawsuit, but this would harm your business even more. Leave the lawsuit to your legal team and focus on doing your job.
Take Every Lawsuit Seriously
Large organizations with hundreds of millions of dollars in assets have the luxury of not regarding frivolous lawsuits seriously. They can just assign a couple in-house attorneys to the matter and let them take care of it.
Smaller firms, on the other hand, can’t do this. You have to take every suit seriously; otherwise, you could find yourself in permanent hot water. Are you prepared to respond?
