You’ve been served with a complaint filed in state or federal court. It’s the start of a journey of discovery!
You may have seen it coming, or it may be a complete surprise. You may be angry because you didn’t do what you’re accused of doing. You might feel dread because you’ve been caught doing something you shouldn’t have done. Maybe your emotions are in between because you don’t know what to feel.
You could be sued by just about anyone. It could be a current or former employee, business partner, or customer. You may be accused of wrongdoing by a local, state, or federal government agency. Your business may not be doing well, and you’ve been taken to court to force you to pay some bills. The legal system is a world of endless possibilities.
What Should I Do First?
You should contact your attorney if you have one as a real estate litigation lawyer would advise. If you don’t, it’s time to find one. If you know other business owners, ask for suggestions. You could also contact other professionals you work with, like your accountant, for recommendations. You have a limited time to file a response, so you don’t have time to waste.
Schedule a meeting. If you have critical documents relevant to the matter, make copies and bring them. You don’t need to bring everything you have, just enough for the attorney to understand what’s going on. You can go on a deep dive through your computer and files to fish out everything relevant later.
Be open and honest in this meeting, even if this attorney is new to you and you don’t end up hiring them. Whatever you say in preparation for litigation is privileged and confidential as our friends at Focus Law LA can assure you. You should admit it and not lie if you’ve done something wrong. This is not the time to hold back. The last thing an attorney wants during litigation is a surprise.
You may have made a really dumb mistake. You may have cheated someone. You may feel ashamed or angry at yourself. Don’t let that stop you from putting all the cards on the table.
Your attorney should be able to answer your questions, explain the legal process, and outline the evidentiary and legal challenges you face. Your attorney may know the opposing party’s lawyer and explain how they may approach the case.
Your attorney may be willing to take the case. It may be in an area of law they’re not experienced with, so they may need to team up with another attorney, or you may be better off just working with a new lawyer who can better represent your business.
Who’s Going To Pay For This?
Lawsuits are why businesses buy insurance. Depending on the reason for the legal action, you may have coverage that will pay for your legal defense, a settlement, or a verdict against you. There are coverage exclusions, so your insurance may not help you, and it has coverage limits, so your carrier doesn’t have a blank check to handle the matter. Work with your attorney to file a claim. Your carrier may hire them or provide you with another lawyer.
If there’s no insurance to protect you, you’ll have to protect yourself. If you have limited resources, you may be better off settling the matter quickly, if possible. If your defense costs and possible verdict against you will overwhelm your resources, it may be time to start thinking about declaring bankruptcy. It would freeze the litigation against you and could end your business, but it may allow you to start another in the future.
If you’re on notice that you will be or have been sued, talk to your attorney. If you don’t have an attorney, hire one who’s a good fit for you and your business.