If you run a business, you could, unfortunately, be hit by a lawsuit at some time. Common types of lawsuits include breaches of contracts, premises liabilities, and discrimination. Going through litigation can be costly, time-consuming, and stressful, so it is best to avoid the matter going to court if possible. There are three main ways of doing that. Firstly, you could negotiate directly with the other party.
Secondly, you could mediate with a neutral third party to facilitate discussions. Thirdly, you could go through arbitration, in which a neutral third party determines what the resolution should be when the two parties cannot agree. However, if you exhaust all three options, it is not the end of the world. Here is a look at what you should consider doing if you are caught in a lawsuit that you cannot avoid.
Review the Lawsuit with a Lawyer
The first thing you should do when you receive a lawsuit is to get an experienced lawyer to examine the papers carefully. Your lawyer will check the caption and service information on the lawsuit to make sure it contains the correct entity. If the information is incorrect in any form, the action can be dismissed in its entirety. If the information is correct, your lawyer can proceed with reviewing the allegations and put the litigation on hold or put a preservation order in place. Hiring a large law firm can be very expensive, but you can reduce your costs by hiring a freelance lawyer instead. In addition to significantly lower overheads, hiring a freelance lawyer gives you access to more diverse talent in all areas of law and comes with a no-strings-attached flexible approach.
Inform Your Insurance Provider of the Lawsuit
Lawsuit complaints like accusations of defamatory remarks about business competitors and third-party injury claims are usually covered by general liability insurance. And allegations from clients that your work caused them financial losses are often covered by professional liability insurance policies, while suits from employees could be covered by employer’s liability insurance. So, you should contact your insurance company as soon as you receive your lawsuit to see if the specific complaint is covered in your policy. However, although many lawsuit complaints are covered by specific business insurance policies, do not assume that will be the case. The important thing is you check.
Decide How to Proceed
You typically have 30 days to respond to a lawsuit after receiving it, although the deadline can alter from state to state. Whatever you do, do not ignore the lawsuit. If you fail to respond within the given time period, the plaintiff has the right to file a Request for Default, meaning the plaintiff will win the case and whatever judgment the court comes to will be enforced. But before you respond to the lawsuit, make sure you discuss with your lawyer the best way to proceed. Your lawyers will be able to explain the litigation plan, your available strategies and options, and the estimated costs of proceeding in different ways. When you respond to the lawsuit, you will need to include admittance or denial of the allegations, your defenses or counterclaims against the plaintiff, and whether you wish to have a jury trial.
The litigation process can take ages and be stressful, so be prepared. Remember to stay calm so you can continue to work in your business’s best interests. By not letting the lawsuit ruffle your feathers, the process will be much easier to deal with.