If you are like most, you probably felt shocked to learn that someone filed a lawsuit against your business. Although your reaction is understandable, try to relax—business litigation against unsuspecting companies happens more often than you might think.
Some people seek litigation for even small perceived injustices. It is part of the legal and financial risks you take as a business owner. Whether the matter is valid or not, you should take the threat of litigation seriously. Below you will learn several first steps to take when facing a business lawsuit.
Confirm the parties
Examine the lawsuit documents to ensure they are using your correct business name. Sometimes, a business lawsuit also names the owner of a company, but the plaintiff must have a valid reason if you formed your business with liability protection. An LLC, for example, can protect your personal assets from a lawsuit.
Seek legal guidance
Legal assistance offers your business many advantages. With an experienced litigation professional, you may find mistakes or problems with the plaintiff’s case. Your advocate can also serve as the individual who communicates with the other side.
Collect your documentation
Search your paper and digital files for every piece of documentation and correspondence between your business and the plaintiff. Often, business litigation defendants locate evidence in their records proving the claim is invalid.
Create a plan
You have a few options for responding to the lawsuit. You may decide it is best to pay the claim and end the situation. However, you could succeed in defending your company. Discuss the options with your counsel to arrive at the best decision.