Business Owners Getting Sued: A Right of Passage for Success

April 7, 2015

5 tips to prepare yourself so the rite of passage for success doesn’t take you down.

Business Owners Getting Sued Boca Raton

Business owner getting sued is virtually a rite of passage in today’s business environment. It’s not that prosperous business owners are involved in conduct that warrants a lawsuit.  Conversely, as a company’s profits increase, the target on their back increases as well.  Anyone seeking a quick payday may decide to sue your business even if they do not have a case. Are you prepared for a lawsuit?

Facing a lawsuit can be daunting. However, you can mitigate some of the anxiety by carefully preparing your response. The first and most important step you should take is to call a competent and experienced attorney to evaluate the claim and your defenses. You should seek out proactive lawyers that have handled cases similar to yours. Partnering with an evolved and thoughtful firm will help you through this trying experience, pun intended.

Tip 1. Meet with a trusted attorney.

During this phase, you and your attorney will evaluate your position and develop a plan of defense to ensure any negative impact on your business is minimized, and determine if there is a way to avoid litigation through some form of resolution.  It is vital to get your lawyer involved as soon as a complaint is served on you, or even prior to that if you know a lawsuit is imminent or a dispute has arisen.  Litigation is defined by deadlines.  Therefore, you want a capable lawyer on your side as soon as possible to ensure your rights and interests are protected.  If you delay making the call, it reduces the time your attorney has in serving or filing documents on your behalf to meet court deadlines.

Tip 2. Gather all pertinent information.

You will need to gather all relevant information regarding the case in order to mount a strong defense.  This includes speaking to all internal parties involved as well as making copies of pertinent documents, contracts, emails, invoices and any other applicable materials. Your attorney will explain the items in detail that you need to collect.  It is also helpful to create a written, chronological account of the events in question.

Do not underestimate the importance of protecting existing documentation.  You are legally obligated to preserve all evidence, including all documentation, electronic data and communications that relate to your dispute once you become aware of a possible dispute; otherwise you could put your case or defense at great risk.  All evidence that can arguably apply to your case must be preserved.  How do you decide what documents can be interpreted as evidence?  In our modern world, many times emails, texts, instant messages, chats and other digital data or communications are considered critical evidence.  If your company has an automatic system in place for destruction of electronic documents, you need to temporarily disable that practice once you become part of a potential legal dispute.  It is a better practice to preserve too much data than too little when it comes to potential legal disputes.  Even if document or data destruction was unintentional, it never looks good in court and could lead to sanctions, negative inferences at trial or additional claims against your company for spoliation of evidence.

Tip 3. Investigate.

Your attorney will guide you on how to properly investigate claims made against your company.

It is important to note that discussions relating to the lawsuit should only include the relevant people within your company, or with your attorney. All written or oral communications individuals that are not your attorney, may not be privileged and can be considered evidence.  As such, do not involve unnecessary parties or individuals especially because those sorts of discussions may be discoverable in litigation.  It is imperative that you do not create unintentional witnesses by speaking about the facts of the case with those who were not originally involved in the original dispute.

Tip 4. Strategize with your attorney.

What are the chances of a ruling in your favor?  Carefully consider the cost of defending the suit or bringing additional claims against other parties that may be responsible.  Would any issues arise during the litigation or trial that cast your company in a negative light?  You may want to engage a public relations professional if the case is high profile or could negatively impact your company.  Coordination between PR and legal teams is essential to ensure consistency in the company’s messages.  It’s also important because public statements can legally bind companies during litigation.

Tip 5. File an insurance claim.

You will also want to consult your attorney about potential insurance coverage that may be available to assist with the defense of, or payment towards, a claim.  Be sure to submit a claim to your insurance agent or the insurance company, such as a directors and officers carrier, because the lawsuit may be covered by your company’s insurance policy.  Most insurance policies mandate prompt notice of any potential or actual claims, so you would want to seek advice from an experienced attorney to consider all available sources to fund or contribute towards litigation costs or satisfaction of claims.  If the insurance company denies your claim, or issues a reservation of rights, an attorney can also assist in determining whether you may challenge the denial or demand more coverage. You may have an independent claim against the insurer for the failure to provide a defense or even coverage.

With a knowledgeable and proactive legal team at your side, facing a lawsuit need not be feared. For an experienced business lawyer, contact the innovative and solution seeking attorneys at Marshall Socarras Grant, P.L. today to have us evaluate your case or assist in ways to better manage or avoid litigation. Tel: 561-361-1000. Email: