Michelle Adams
Lawyer, Entrepreneur and Coach
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The Legal Seller Blog

The Legal Seller blog is a resource for Entrepreneurs & Professionals

What to do When You've Been Sued



We are a litigious society.  As such, every business owner faces the risk of someday being involved in a lawsuit.  I've defended hundreds, if not thousands, of lawsuits over my career and yet it was the threat of a lawsuit against my own business that made me fully aware of all of the feelings that go with those papers filled with legal jargon.  If you're involved in a legal battle, the following are some tips to help you make it through it.

1.  There are steps you can take to protect yourself even before the papers are filed.  First and most importantly, get insurance.  You should meet with an insurance agent who will come to your business and walk you through all the lines of insurance your business requires---including Commercial General Liability, Business insurance, Worker's Comp, Auto Insurance, Professional Liability and more.  Having insurance is one of the most important things you can do for your business because not only will you be covered in the event you are sued, but your insurance company will also assign you a qualified defense attorney to represent you.  The insurance company spends a lot of time investigating qualified legal counsel for their insureds and forms relationships with attorneys of their choosing that will make your representation in the lawsuit more successful than if you go out and hire an attorney of your own.  Trust the process of insurance defense and feel confident you are getting great representation. 

2.  If you're involved in a situation that you feel may turn into a lawsuit it is important to start acting as if the lawsuit has been filed.  Perhaps it's a contractual issue and you've had some heated arguments with the other party.  It's time to start being proactive and protect your business.  Cease having direct communication with the other party.  Gather any and all records, contracts and receipts into a folder.  Keep any recorded messages.  Put your insurance company on notice of a potential situation so that defense counsel can be assigned to you and instruct you further on what to do.

3.  Once you've been served with summons, immediately turn that over to your insurance company or defense counsel.  If you don't have insurance, hire an attorney of your own.  Not all attorneys have experience defending a lawsuit.  Call your local bar association for a list of attorneys in your local area that do have experience with the type of lawsuit you've been served with.  If you know a lawsuit has been filed against you but you're avoiding service---you're usually just delaying the process.  There are ways to obtain service against you without personally serving you, such as written publication in a newspaper.  Very rarely are cases dismissed for failure to obtain service.  Therefore, it's often best to accept service and let your attorney fight the battle of poor service if that's the case.

4.  Work with your assigned counsel to defend the lawsuit.  Lawsuits take a bit of time to resolve and go through several stages---pleadings, written discovery, oral discovery, motions, pre-trial and trial.  Your lawsuit requires your active participation to be successful.  If your attorney can't get in touch with your or doesn't have your help, it's likely your suit will not be resolved in your favor.  Moreover, if you haven't provided your attorney with everything, both written and oral facts, then you cannot expect a great outcome.  I can't tell you how many times I discovered my own client was not telling me the truth or had not provided me with something important to defend the case.  In those situations the often the only option left to an attorney is to recommend settlement, or risk a guilty at trial.  If you are a professional, a settlement or guilty verdict may result in disciplinary action by your licensing board.  It is so important to confide everything to your attorney so they can best defend you.

5.  Lawsuits are emotional and trying.  Someone is alleging that you've done something wrong and that's both upsetting and disturbing.  But remember that a lawsuit is a process and you need to trust the process that will result in your favor if you've done nothing wrong.  It just may take a bit of time to get there.  In the meantime, you need to go on with your life using the lawsuit as information to help you do things better in the future.  When my own business was threatened it was frustrating because we had done nothing wrong legally.  However, I used the information to put better processes in place to prevent not just future lawsuits, but also future threats.  Whether it's a revision to your policies, a premises liability issue or contractual, just use the lawsuit as information to help make your business even better than it was before.  

The best way to prevent a lawsuit is to put the proper processes in place in your business and become fully legal.  We will discuss the stages of a lawsuit in a future post, as well as ways you can become legal.  In the meantime, if you're involved in a lawsuit, stay calm and follow the advice of your legal counsel for the best outcome.  Allow your attorney to be your partner in this battle.  If you need to know more about putting processes in place, I offer a workshop called The Legal Compass where we go over your business from head to toe.  Stay calm and keep grinding!