Regardless of the source – be it consumer, employee, or another business – getting sued can be a nightmare. What should you do, what should you not do, and what should you expect? Here’s some guidance to help your business through the process.
1. Hire the right lawyer – one with experience defending the particular legal issue involved in the lawsuit.
Of course, the first step is to hire a lawyer. This is because most states have laws requiring that a corporation or other business entity hire legal representation. Generally speaking, these organizations are not permitted to defend themselves in court without the representation of counsel. It’s critical to hire the right lawyer with experience in the particular area of the law involved in the lawsuit. When interviewing lawyers to defend the lawsuit, ask if they have defended similar cases in the past, how often, and what results were achieved. Ask for their thoughts about defense strategies and their previous successes.
Most federal courts require a defendant to respond to a lawsuit within 21 days after receipt of the lawsuit papers. State courts vary with respect to response time, but most state courts require a response to a lawsuit within 28 or 30 days. That is not a lot of time. Your business should not delay interviewing lawyers so that you have enough time to make the right decision about who to hire.
2. Take steps to preserve information that may be relevant.
Once you receive notice that a lawsuit has been filed, you have a legal duty to preserve information that may relate to the subject matter of the lawsuit. The scope of this duty is fairly broad and includes preserving not only documents but also emails, texts, and other electronic information. You should identify who may have emails or other information pertaining to the subject matter of the lawsuit and take steps to make sure these are not deleted on some type of timed deletion system. This is one of the biggest reasons litigants can get in trouble – by deleting emails and other relevant information even when it is not intentional.
3. Be careful about what you say.
What you say can hurt you. Emails and other information related to the lawsuit may be subject to a process called discovery whereby the plaintiff is entitled to request and receive information related to the underlying facts of the dispute. Minimize conversations internally about the subject matter of the lawsuit because those communications which occur without your lawyer present can be ones that the plaintiff can request. Any communication you have about the lawsuit with your lawyer present will be protected by attorney-client privilege. Generally speaking, the best practice is to only have communication about the lawsuit at the direction of your lawyer.
4. Understand the timing of the case and consider all your options for resolution, including settlement.
While taking a case to trial and winning may be the first thought for a party who has been sued, the reality is that most cases settle before reaching a courtroom. For many reasons, including consideration of the costs of defending a lawsuit, you should ask your lawyer about the prospects for settlement early in a case, and whether that is a realistic outcome.
If early settlement is not realistic for your circumstances, ask your lawyer for expectations on timing of the lawsuit. Lawsuits can move through different courts at very different paces. It’s important to know, and set expectations internally, on how long the lawsuit might take. For example, in federal courts, a lawsuit may last for 2 years or more. In contrast, a lawsuit may only last for 6 months in state courts. What impact does this timing have on you and your business? Having a reasonable understanding of anticipated timing is very important for business owners and employees who may have to assist the lawyer with defending the lawsuit.
5. So, what can you expect during the lawsuit process?
Lawsuits have many phases. First, the plaintiff files a Complaint. In the Complaint, the plaintiff will state the facts that gave rise to the dispute and state the legal reasons why they are seeking relief, which is most often money. The defendant then files an Answer or other type of Motion to Dismiss the case. An Answer is a document in which the defendant admits to or denies what the plaintiff alleges and asserts defenses to the legal claims. A Motion to Dismiss can be premised on multiple grounds, and your lawyer can advise if your business has grounds to request the case be dismissed.
If the case is not dismissed, then the lawsuit proceeds into the next phase called Discovery. This is where the parties exchange information about the facts related to the underlying lawsuit. Discovery includes written requests for information. It also includes depositions in which witnesses provide testimony about their knowledge of the underlying facts. Your lawyer will be able to help you navigate this process of providing information and preparing witnesses for a deposition.
After Discovery is completed, your lawyer may advise your company to file a Summary Judgment Motion. A summary judgment motion is submitted to the court to decide if, based on undisputed facts, the plaintiff has enough evidence to submit to a jury. If there is not enough evidence for a jury to potentially decide in favor of the plaintiff, then the court will dismiss the case.
Typically, most courts will require the disputing parties to participate in some type of settlement conference or mediation. This process usually involves a neutral third party evaluating whether a settlement can be reached between the parties. Even if the court does not order the parties to a settlement conference or mediation, your lawyer may recommend that you do one voluntarily. This is usually a helpful process in determining whether settlement of the lawsuit makes sense for your business.
The entire process will likely be driven by a court-ordered case schedule requiring that each phase of the lawsuit be completed by certain dates. Courts vary widely on the overall timing imposed for the parties to complete each phase of the case prior to a trial. It will be important for you to understand these deadlines and the timing of the case so that your business can plan accordingly. Although television shows and movies depict the process of getting to trial as a quick process, that is not the case. Many steps exist long before a trial ever takes place. In fact, in federal court, it can take two years or longer before a trial occurs.
No matter how well or ethically they are run, few businesses escape the threat of a lawsuit at some point in their lifecycle. Litigation can be a long and expensive process, which is why all options for dispute resolution should be considered. However, with the right lawyer and some perseverance, your business will get through the process.
If your business gets sued, our Litigation Team brings years of valuable trial experience to the table and can help you navigate through the rough waters of litigation.
