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Three steps for businesses facing a lawsuit

At some point in time, a business owner may face a lawsuit. This suit could be the result of any number of things such as an employee who alleges employment law violations like discrimination or harassment, a client who has issues with the business' products or services, or a slip and fall accident involving a member of the public.

Whatever the reason for the lawsuit, it is important to respond. But how? The exact plan will vary depending on the details of the allegations. However, in most situations these first three steps will apply:

  • Review the case with legal counsel. If you have in-house counsel, review the lawsuit with your legal professional. If not, contact a business litigator. This initial review will often include a careful examination of the information related to and contained in the lawsuit. If the petition was not served properly or any of the information is incorrect, you may decide to  file to have the lawsuit dismissed. In other cases, you should can prepare to move forward.
  • Notify insurance. You have insurance for a reason. Use it. Although it will not always cover a lawsuit, professional liability or employer's liability policies could apply to lawsuits involving current or former employees, umbrella policies could extend to cover other allegations.
  • Draft a response. Have an attorney explain the potential impact of the lawsuit. Discuss liabilities and how your response could further expose your business. Which option is better for your business' future success? Is alternative dispute mediation like arbitration or mediation required or would the case go to trial? What are exit strategies if you move forward or is it best to negotiate a settlement? An attorney can draft the response based on your decisions during these conversations.

When looking for an attorney to handle the suit, hire legal counsel with experience in both courtroom and business law and do so in a timely manner. In many cases, a response is required in three or four weeks.

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