TEN DO’S AND DON’TS IF YOUR BUSINESS IS SUED
So the worst has happened – you became involved in a dispute with a customer, supplier, shipper, or someone else you do business with, and they have now sued your business. What now? This short article will give you some “do’s” and “don’ts” if you become involved in business litigation.
- Read the lawsuit. You need to know what you are being accused of, so that you explain the facts to an attorney. You also need to know what the suit is about so you can select the a lawyer with the right expertise for the case. For example, if the suit claims your company breached a contract or committed fraud, you’ll need a business litigation lawyer. If an employee dispute is involved, you should talk to an employment attorney.
- Contact an attorney immediately. Texas law gives you little time to respond to a lawsuit –until the next Monday that occurs following 20 days after you are served. In Federal court, you have only 21 days from the date of service. If you fail to respond by the deadline, your opponent could obtain a judgment against you by default.
- Begin gathering relevant information. Locate any information you have about the dispute, including documents and electronic data. Also, prepare a chronology of events and people involved.
- Contact your insurance carrier. In some instances, your insurance company may pay damages related to the suit and may even provide your business with an attorney. However, insurance policies have time limits for you to notify them that your business has been sued, so do so promptly.
- Be honest with your attorney. Provide your attorney with all the facts and documents related to the case, even if they don’t favor your side. By giving your attorney only the favorable facts, you are setting him or her up for an ambush down the road.
- Try to Resolve or Settle the Suit Yourself. In fact, do not communicate in any way with the plaintiff (the person or entity who has sued you) – contact an attorney instead. You may say or do something you will regret later.
- Destroy or hide any documents, electronic media or physical evidence related to the case. Getting rid of relevant evidence will make your case look bad and may ultimately cause a court to penalize you in some way. If your company has a document destruction policy, stop it immediately regarding anything related to the case.
- Attempt to Retaliate. Control your anger, and don’t attempt to damage, injure or defame the person or entity who has sued you.
- Talk Extensively About the Case. The only persons you should talk to about the case are those in your organization who are involved in the case or who need to know about it for business reasons. Avoid telling anyone who will listen about your side of the case, as you may say something that may eventually hurt you in the lawsuit.
- Refuse to Honor Legal Commitments. If you have continuing legal commitments to the plaintiff, don’t refuse to comply with them unless the plaintiff prevents you from doing so, or you are instructed to do so by an attorney.
The Law Office of Paul R. Clevenger stands ready to help you if you or your company is sued in a business matter. Feel free to give us a call.