Owning and operating a business is not without risk. There’s always a risk the business could fail, which can leave an entrepreneur with a damaged professional reputation and sizeable personal debts. A business owner could find themselves facing similar outcomes as the result of a lawsuit filed by an unhappy customer or disgruntled ex-employee. However, while being sued is deeply upsetting, it’s imperative that you not panic. Here are a few tips on how to react if your business is being taken to court.
Contact an attorney
The first thing you should do after being served is to call a lawyer. As a business owner, it’s a good idea to have the phone number of an attorney who has experience in your field as a matter of course. You never know when a situation will arise that will necessitate the intervention of a lawyer. A qualified attorney will be able to advise you on how to respond to the suit and the various options you have available to you. For instance, as some 95 percent of lawsuits end in pre-trial settlements, a lawyer may be able to resolve your problem before it turns into a lengthy and costly trial.
Don’t contact the other party
If you’re like most people, when you’re accused of doing something wrong, you feel the impulse to address your accuser. As this Find Law blog post explains, this impulse is entirely understandable, but it should be ignored at all costs. All communication with the party suing you should be handled by your attorney. Speaking directly with the person suing you could inadvertently serve to bolster their case against you. As an example, doing something as innocuous as expressing sympathy to the other party for the circumstances that led them to file suit could be misconstrued as an admission of guilt.
Get your house in order
After consulting with your attorney, you should begin gathering together any documents that might have anything to do with the lawsuit. If the case goes to court, the plaintiff’s attorneys will send over a list of information that they’ll need to review during pre-trial discovery, but it’s a good idea to gather documents regardless. These documents include contracts, work orders, purchase agreements, employee records, timecards, returned checks, printouts of any emails you’ve exchanged with the plaintiff and any surveillance footage that relates to the suit. You should create written statements outlining the events preceding the filing of the lawsuit that are as detailed as possible. Also, give “no comment” responses to any media inquiries about the case until you have a chance to confer with your lawyers to craft a statement for the press.
This article was written by Mario McKellop of Examiner.com for CBS Small Business Pulse.