What Happens When Your Business Gets Sued?

Someone may file a lawsuit against your business despite you taking precautions. If this is the case, then what happens next? In general, there are two kinds of people. The first type is the ones who have been sued before, and they understand the situation and what will happen if it occurs again. The second type is the people who have never been sued and live with the anxiety that it might eventually happen. 

Do I Have to worry About a Lawsuit?

While there is a chance that you’ll be able to get by without having to deal with a lawsuit, it’s still a very intimidating thought. One of the best things you can do to help make the concept less intimidating is to go through and make sure that you understand the process. The more you can educate yourself about the subject, the more confident you can feel that you’re prepared. 

So, if you do get sued, how does that process work? In the modern market, the first way that you’ll find out you’ve been named in a lawsuit (if you weren’t already experiencing some back-and-forth communication with the opposing side) is that you’ll receive a letter, email, text, or phone call from a lawyer letting you know that you’re being sued. They’ll try to sell you on their law firm and convince you they are the best to defend you. They’ll usually get to you sooner than the lawsuit itself. 

What Do I do About a Lawsuit?

When you receive this information from the law firm, the best thing to do is to take this information and be glad you know about the suit — but never hire the first company to contact you. Instead, go to a trusted advisor and get a referral or do some research online to determine which law firm is the best. Ideally, it would be someone that specializes in that specific area of the law that you’re getting sued over. 

You want representation from an expert in the area. Once you figure out what the suit is about and what’s going on, you will eventually get served by the local sheriff or a processor. They’ll show up and physically hand you the papers regarding the matter. If you have a registered agent or lawyer with a company, they will get served instead of you, and then they will then forward you the information. 

How Do I Respond to a Business Lawsuit?

After you are notified, and the papers are served, you have up to 20 days to respond. Within that period, assuming you are a business, you legally have to have a lawyer to represent you. The court rules require all companies to be represented by an attorney. The exception to this rule is any case valued at less than $8,000. Small claims courts operate under a different set of rules. 

If it is a small claims case and it’s being settled in the correlating court system, then it would typically make more sense to represent yourself. In many cases, hiring a lawyer will cost more than paying the amount of the suit in a small claims court. 

How Will Hiring a Lawyer Help?

If you hire a lawyer, they will be responsible for filing a response within the aforementioned 20-day period. The answer doesn’t have to be decisive; it can be as simple as asking for more time. At this point, it’s more to indicate that you have received notification that you are being sued. 

Next, send the information to your insurance agent. Sometimes, they will cover the price of lawsuits over certain things. Even if you don’t think they cover it, you should always send it to your insurance agent. It never hurts, and they may find a way to get you the compensation you didn’t realize. 

As for how long the case will last, it will typically be a timespan of six to 18 months, depending on the case’s complexity. The majority of that timeframe will be spent on the discovery step of this journey. This includes the exchange of written questions, documents, and depositions. 

For personalized help with all of your insurance needs, contact Dopazo and Asociates!