A lawsuit can really take a toll on your company, whether it has been filed by a client, employee, or other business. How you react to the situation will highly influence the way forward for your company. Here are four steps you need to take if you have been served with a lawsuit.
1. Consult an attorney
As soon as you receive the suit papers, consult an experienced business lawyer to review them carefully. Ensure that the lawsuit information contains the right person or entity associated with the case. You may be able to dismiss the action if there are any errors in this information. If the information is correct, you need to put a preservation order or litigation hold in place after reviewing the allegations. This means preserving all records and data that are related to the case in any way. These records include photos, videos, documents, voice messages, and electronic material such as web pages, email, and text messages.
2. Inform your insurance provider
There are various insurance policies that cover companies in case of a lawsuit. General liability insurance typically covers third party injury claims and allegations of damaging remarks about another establishment. Professional liability covers client allegations that they incurred a financial loss as a result of your work. Employer’s liability insurance covers lawsuits filed by employees.
If your insurance approves the claim, the benefits may cover the court costs, attorney fees, and any penalties or settlement you are required to pay. To preserve insurance coverage, it is important to forward the suit papers immediately to the insurer. It is generally advisable to keep your attorney informed of any claims against your company, even if the case is in the hands of your insurance company. Be sure to check out our blog post “4 Benefits of Having Ongoing General Counsel Services for Your Business” here.
3. Decide how to respond to the claim
You typically have 20 days to respond to the complaint after you have been served with the paperwork. Assuming you don’t have a basis to dismiss the action outright through a “Motion to Dismiss,” your answer to the summons should include:
- Admittance or denial of the accusations
- Your defenses or counter allegations against the plaintiff
- Whether you prefer a jury trial or other resolution method
Once you understand the nature and degree of the case against your business, you’ll be able to make an informed decision on how to proceed. If it is possible to settle the dispute out of court, consider doing so as litigation costs can rise considerably. Discuss with your attorney whether it is a good idea to suggest an alternative dispute resolution method to the plaintiff.
4. Get a defense attorney
Unless you are in small claims court, Florida law prohibits a business from being unrepresented by counsel in a litigation. This means that you, as the owner of the business, cannot represent the business itself in the lawsuit; rather, the business must be represented by an attorney.
If your insurance company is handling the claim or you have an attorney on retainer, you don’t have to find a defense lawyer for your case. However, getting an attorney who specializes in that particular lawsuit can be helpful in the grand scheme of things. Your counsel should be familiar with the type of claim contained in the complaint, as well as the court where the action is pending. For instance, defending a case about a defective product is different from defending one that is about a workplace accident. Defending a case in federal court can be materially different from defending a case in state court.
The best way to protect your business from a damaging lawsuit is to hire a highly trained and experienced attorney. For any queries or further assistance, Rodriguez-Albizu Law has your back. Contact us today.