The most significant source of joy in starting a business is knowing you’re a solution to someone’s problem and fulfilling their need, so it gets frustrating for a client to pursue litigation against you concerning the business. This can be much worse if the mistake committed wasn’t your fault. However, there may be scenarios where organizations may face legal scrutiny due to changes in certain aspects of business law and their compliance level.
Even then, going toe to toe with legal practitioners for whatever reason can be scary for business. For startups, especially, this can be their worst nightmare. Since most of them are in the initial stages of growth, they may fail to fully comply due to procedural and lengthy processes of acquiring operational permits. This means their owners must always be prepared to withstand potential litigation at their businesses’ initial stages.
This article on being served papers explores expert advice essential whenever a business is facing a lawsuit.
Review the Case with an Attorney
Immediately after receiving these papers, you must contact an experienced company lawyer or a qualified legal officer. The lawyer has to verify the caption and service information on the lawsuit to ensure it has a proper entity or the person associated with the issues addressed. If and when you find out the information is incorrect, you must dismiss it wholly. If it is correct, proceed with counter checking the allegations. At this point, you need to put a litigation hold or a preservation order in place.
No matter how irrelevant it may sound, it is crucial to preserve all records concerning this case. These may be documents, email, webpages, voice messages, videos, photos, and electronic material. Sometimes a document destruction policy may appear as a caveat in preserving these records and should be suspended pending consultation with the lawyer.
Remember to not communicate directly with the plaintiff at this point. It is expressed anything said before the hearing may be used against the accused at the court of law, applies indefinitely. If you must communicate with a former employee or a client from a company you have a business relationship with, then make it clear from the onset you’re not going to discuss the lawsuit with them.
Inform the Insurance Provider of the Lawsuit
There is a variety of insurance items available to cover the business in times of lawsuit. General liability insurance covers accusations of defamatory claims about a competitor and any third-party injury claims. A professional liability policy also covers allegations regarding financial loss your business may have caused to given clients.
Employment practices liability insurance may cover employee lawsuits included in worker’s compensation policies. In instances where you believe a current policy covers the suit, you must communicate with the insurance provider and inquire.
A significant number of insurance companies require suit papers to be submitted promptly to the insurer to preserve the insurance coverage. However, do not make an unfounded assumption your insurance will cover the lawsuit.
Make a Decision on the Procedure of Response to the Complaint
After receiving a lawsuit, the accused party is expected to make a written response in thirty days, though this may vary from place to place. The answer may entail admitting or denying each of the plaintiff’s accusations. You can mount a defense or a counterclaim against the plaintiff or other defendants.
At this point, it must be made clear whether the defendant or the plaintiff would prefer a jury trial or an out of court settlement. Litigation ramifications can be very costly in terms of finances and business reputation, so it is advised defendants fully understand the nature and liability of their companies’ exposure.
It is required of you to consult with the lawyer on the most effective means of proceeding with the case. The lawyer must explain the litigation plan, estimated costs, and potential exit strategies, if any. The lawyer must layout the pros and cons of proceeding with the lawsuit at the court.
The insurance coverage level may significantly impact the pursuance of other options. This may help the defendant choose to rely on counterclaims in instances where the claim may not have been covered. Again, it is in the best interests of the business to settle the soonest as possible. Never attempt to ignore a lawsuit. This may be costly as the plaintiff can win the case in the defendant’s absentia.
Find a Defense Attorney if You Don’t Have One.
Some organizations may have a standby lawyer who handles all lawsuits pertaining to the company. Some insurance providers may get a company an attorney, meaning you may never have to take this extra step at all, but dependent on the lawsuit’s intricacy, the defendant must insist on finding an attorney who has vertical expertise on the particular suit.
In more advanced lawsuit scenarios, you may even want to hire a counsel with experience in the court where proceedings are scheduled to take place. Defending robbery with violence is different from defending a money laundering accusation, for instance.
A legal practitioner may be specialized in business law but may be relatively incompetent in industrial relations and labor law. Employer-employee disputes require extra specific know-how as defendants have to fully be conscious of documents like the human resources manual and labor laws governing employer federations.
Most of these specialized legal officers also have realistic charging models, making litigation and representation costs easier. You may need to enquire for testimonials from other clients they’ve represented. Again, find attorneys who communicate promptly regarding the case progress.
Dos and Don’ts During and After the Case
Litigation can be stressful, emotionally, and financially draining, but it is required that the accused follow through specialized pieces of advice that can bridge the gap and make litigation conservative.
Don’t try to cover up information from the lawyer. Let them be aware of all the events leading to the lawsuit. Not sharing vital information is unprofessional. After all, it will surely come out at some point during the trial, and you surely don’t want to catch your lawyer by surprise. Letting them know at the earliest helps them in lawsuit planning and execution.
Remain diligent and prompt in your responses to invoices. Ask questions as they arise. Be free and share information. Please do not delay as it may cost you in the long run.
Work on your confidence and hold your head high up. Do not let this lawsuit spend your entrepreneurial spirit and eat your energy up. You still got a business to run, and the sooner you tighten up, the easier the case will become for you. Stay focused on your business and be keen on minimizing the time spent in this lawsuit. Avoid sounding proud.
Winning a case alone doesn’t mean you’ve done well for your company. In some instances, settling the plaintiff may even be less costly. You may make an out of the court settlement proposition based on this idea and get your business back on track. Protracted court battles may be unhealthy for any business.
As an entrepreneur, it is vital to equip yourself beforehand with types of predominant lawsuits. These may include a breach of contract, slip and fall accidents, premises liability, auto accidents, discrimination against employees and customers, harassment, employee injury or sickness, and violation of intellectual property rights.
This article is enlightenment for businesses as they endeavor to protect their routine activities against litigation. Again, since prevention is better than cure, adhering to policies that safeguard business engagements may go a long way in minimizing predisposing causes of litigation.