Getting sued is a complicated legal process, as most things are when it comes to law, and the really difficult thing is that it’s not pleasant. Businesses often get into legal battles before they fully understand what a legal battle entails, and a prolonged lawsuit can cripple a small business before it even takes off. Getting sued is never a subject you want to be forced to read about, but just like that Micro-economic class in high school, it may come in handy one day.
A straight-faced man with a large envelope throws open the front doors of your business, makes a beeline for your office, and puts the envelope on your desk with a thump. “You’ve been served”—or in layman’s terms, you’re being sued. The process begins.
The envelope, usually delivered by a third-party, is a court summons and petition/complaint. On the summons will be the details of who is suing you and why, in addition to information concerning when, where, and how to respond to the lawsuit.
After you’ve read the documents closely and fully understand the lawsuit against you, immediately call your attorney. If you don’t have one, that’s all the more reason to act quickly and find one. You can ask business associates and friends, or go online, to find an attorney that has expertise in cases like yours.
Finding and consulting an attorney can be a lengthy process – all the while, the date to respond to the summons is coming closer. Be sure you know when you must respond by, and prepare for it promptly with your attorney. Thus, quickly finding or contacting your attorney is key when preparing for a lawsuit.
Also, notify your insurance agent in addition to your attorney. Just because you are covered from other business risks, like employee injury, doesn’t mean the lawsuit will also be covered. Some insurance companies hire attorneys for their clients, so they may even be of some help in that matter.
But again, this process takes time, and in order for the attorney hired by you or your insurance company to properly mount a defense, immediate action must be taken when you receive the summons.
If you are unable to find an attorney and mount a proper defense by the trial time, the plaintiff can make a default judgment claim on you, meaning you lose the lawsuit whether you have a good defense or not. The typical summons gives you 30 days to respond, but your attorney may file for an extension on your behalf to give you time to prepare.
The two most common lawsuits waged against small businesses are product quality disputes and billing issues
If proper documentation is available, the case may be a simple fix. Regardless, it is advised that you never talk with the opposing attorney without first consulting your own, as your statements could be used against you in court.
Also, be sure to talk to your attorney about the estimated costs and fees of the lawsuit so the bill doesn’t come as a surprise. Consider organizing a budget and schedule of work with your attorney so you can better manage financial costs associated with your defense.
And lastly, be patient.
Prepping for a trial can be a lengthy process, 18-24 months in most cases. Make sure the communication line between you and your attorney stays open during the whole pre-trial process. Unfortunately, being sued is inevitable if you stay in business long enough, so don’t get discouraged. By acting quickly and bunkering down the hatches, your small business can be better defended.
Take advantage of the host of resources for small businesses available on our blog.