No business owner wants to receive notice of a lawsuit. Regardless of the size of your business, being sued can interrupt business operations, create unforeseen financial burdens, and feel overwhelming. If your company is facing a lawsuit, you should reach out to Lacy Katzen LLP‘s experienced attorneys, to learn more about what you should do and how our firm may be able to help.
5 Steps to Take if Your Business is Being Sued
1. Do not ignore the lawsuit.
It may be tempting to set the papers aside and hope the issue will go away. This is a mistake that can cost your business dearly. Once you are served with legal papers, you are on a strict deadline to respond. Failing to answer a complaint in a timely manner could result in a default judgment, meaning the court could rule against your business without hearing your side of the story. Instead of ignoring the lawsuit, take it seriously from the start and begin gathering the documents you need and immediately contact a qualified attorney.
2. Contact a qualified business attorney right away.
Time is of the essence when defending your company. The legal system in New York has its own rules, timelines, and procedures that can be complex. A business lawyer who understands these requirements can help you evaluate the lawsuit and advise you on the best way to proceed. You should get an attorney involved as soon as possible. Even if you think the claim is baseless, a lawyer can help protect your rights and work toward a resolution that may minimize the harm to your business.
3. Preserve all records related to the case.
Once you know your business is involved in a lawsuit, it is essential to gather and secure any documents, emails, contracts, or other evidence that could be relevant to the case and preserve them in their current condition. Do not withhold evidence from your attorney that you think may be damaging. Your attorney will need all available evidence in order to protect your interests. Destroying, altering, withholding, or failing to keep evidence could lead to penalties or harm your defense. It’s a good idea to organize these materials as best you can, so your attorney has everything needed to evaluate the situation.
4. Refrain from communicating directly with the opposing party.
It might seem like a good idea to reach out and try to resolve the matter informally. This is generally not a good idea because your statements may be used against you later, and may be misunderstood or misrepresented. Let your attorney handle communication with the other side. This protects you and ensures that any discussions are handled professionally and strategically.
5. Review your insurance coverage.
Business insurance policies often provide protection against certain types of lawsuits. It is important to notify your insurance carrier as soon as possible, as there may be coverage that applies. Your policy might provide counsel, depending on the claim and your policy. Failing to give timely notice could jeopardize your coverage and result in you incurring costs that could have been avoided.
Ultimately, facing a lawsuit is stressful, but you don’t have to face it alone. By taking prompt action, you can help protect your business and position it for the best possible outcome. If your company has been sued, do not wait. Contact Lacy Katzen LLP today.
