Running a business is a risky venture. Everything you do is scrutinized closely, and any misstep can result in a lawsuit. Therefore, it’s essential to know how to handle a business lawsuit when it arises.
Remember that the steps you take from the time you receive the complaint to the completion of the case can severely impact the outcome.
Therefore, it is your responsibility to ensure you understand your rights, follow the proper procedures, and represent yourself in the best possible way.
This article outlines critical steps to take when faced with a business lawsuit. Read on to learn more.
Confirm the Named Defendant
The first thing you need to do when faced with a business lawsuit is to confirm that the person named as a defendant in the complaint is indeed your business.
Typically, a business will be named as either an individual or corporation, but it could also include partnerships, limited liability companies (LLCs), and other entities.
You may also be named in the lawsuit, but you have to remember that one of the reasons you have a registered business is to separate your personal liability from the company’s. Therefore, the plaintiff must have a clear-cut reason to name you as a defendant.
If the details in the lawsuit are incorrect or incomplete, you can file a motion to dismiss the complaint or request an amendment.
Carefully Review the Complaint
Once you have been served and confirmed that you are a defendant in the lawsuit, carefully read and review the complaint. This will allow you to understand what is alleged and how severe your potential liability could be.
If you are unsure what any of the terminologies in the complaint means, consult with an attorney. It is essential to understand precisely what it is that you are being accused of and what type of damages may be sought by the plaintiff.
Remember that your business can be sued for various reasons, including breach of contract, personal injury, negligence, or even for business practices that violate state and federal laws.
Hire a Lawyer
The next step is to hire a lawyer experienced in business law. A good lawyer will be familiar with local, state, and federal laws applicable to your business and the specific procedures for your jurisdiction.
They will be able to advise you on the best legal strategy for defending against the lawsuit.
Your lawyer may also be able to reach a settlement that is favorable to your business and saves you time, money, and stress.
In any event, consult with an experienced attorney who can protect your rights and interests throughout the process.
However, you need to be careful with the advice you receive since not all advice is good. Make sure your lawyer is familiar with the applicable laws and procedures for your state and jurisdiction.
Respond to the Complaint
Once you have reviewed the complaint and understand what it is alleging, you need to respond to it. Your response should be in writing and notarized by a public notary.
Your response should include a brief explanation of why you contest the allegations and any relevant evidence or other documents that support your defense.
Also, make sure to file your response within the required time frame or else it could be dismissed.
Refrain From Making Statements
When contacted by anyone regarding a business lawsuit, it is vital to remain calm and refrain from making any statement until you have consulted with an attorney.
While it may be tempting to comment or provide explanations, these can later be used against you in court.
It is important to remember that the plaintiff may be trying to gather information about your business and its practices, so it is best to stay silent until you have had an opportunity to discuss the situation with an attorney.
Prepare for Trial
If you cannot reach a settlement with the plaintiff, you may need to prepare for a trial. At this point, you should review relevant documents, collect evidence and witnesses, and prepare legal arguments supporting your case.
Your attorney will also be able to advise you on the proper procedures for filing motions and other documents with the court.
Depending on the complexity of the case, you may also have to attend depositions, hearings, and pre-trial conferences.
Being served with a business lawsuit can be a stressful experience. It is essential to take the right steps to protect your interests and respond appropriately to the complaint.
A qualified attorney specializing in business law should be consulted to ensure you have the best chance of prevailing.
Once a response is filed and the trial begins, you will likely need to appear in court, so it is essential to understand the process and be prepared for anything.
Taking proactive steps now can help minimize your losses in the future.