Businesses of all sizes and types are vulnerable to lawsuits. If the lawsuit progresses to a courtroom, there may be devastating effects on the company. It may hamper a business’s finances and funding, ability to operate normally, and even its reputation among customers and business partners.
Many smaller businesses do not have the luxury of in-house legal counsel. They may be taken by complete surprise when an employee, client, vendor, insurer, financial partner, or another party files a lawsuit against them. Common causes of business litigation include:
- Breach of contract.
- Intellectual property rights/trade secrets.
- Partnership disputes.
- Insurance disputes.
Review the case with a trusted and experienced business lawyer. They can advise you on how they can help you respond. They may even find incorrect information from the start and move to dismiss the lawsuit. If information is correct, they will quickly put a preservation order in place to preserve relevant data, including documents and electronic materials.
As a business owner, you should never communicate directly with the person or entity that has filed the lawsuit to try and resolve the issue. Any words or actions can be held against you in litigation; always let a business lawyer speak on your behalf.
Inform Your Insurer of the Complaint
Most businesses have several different types of insurance policies to cover a variety of situations. They should immediately contact the appropriate insurer. Insurance will often cover costs, and the insurance company may also use its own counsel defense. Even so, the business should also keep its own counsel informed of proceedings.
Have Legal Counsel
A lawsuit usually comes with a requirement to submit a written response within 30 days or another timeframe. That is another reason to quickly hire legal counsel. The written response needs to come from a lawyer and must include:
- Admittance or denial of each allegation.
- Defense and counter/cross-claims against the plaintiff or other defendants.
- Whether you want a jury trial or alternative resolution.
Before submitting the response, your lawyer will discuss with you options for resolution, insurance coverage, potential counterclaims, such as holding another party responsible, dismissals of all or part of a complaint, and other issues.
Tips for During and After the Case
As you and your legal counsel work toward negotiation or litigation, follow these tips to help ensure a successful process:
- Be quiet: Do not discuss the case with anyone but legal counsel and those in the company who need to know.
- Be honest: Do not hide any information or cover anything up. Your lawyer should never be surprised by new information.
- Be prompt and diligent: Your lawyer will ask for a lot of information, and you must respond quickly to avoid delays.
- Stay focused on your business: A lawsuit may be stressful, but it does not mean you are guilty of something. Let the appropriate parties decide that while you focus on running a good and ethical business.
- Learn: If a lawsuit comes up, then review your employment-related practices, policies, handbooks, and management training. You should make changes where necessary.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Can Help if Your Business Is Being Sued
Our Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. have the skill and knowledge to defend your business if you are being sued. We provide counsel on business conflicts and disputes involving employment, partnerships, contracts, and other related issues. For an initial consultation, contact us online or call us at 215-574-0600. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.