Having a process server deliver notice of a lawsuit to your business can cause you considerable stress and anxiety. Although business litigation can have a disruptive and potentially catastrophic effect on your company, knowing what to do when your business gets sued can help protect your interests. Here are the steps your business should take after receiving a complaint and summons for a lawsuit.
Stay Calm and Review the Complaint
As a first step, when you receive notice of a lawsuit against your company, remember to stay calm. Getting stressed or panicking could lead to rash actions that may jeopardize your options or interests. Instead, you should carefully read the lawsuit paperwork delivered to your business to review the basics of the suit, including the identity of the party or parties that have sued you, the claims they have made against you, and what relief they want the court to provide (typically discussed at the end of the complaint).
Furthermore, the summons from the court will provide key information about how to respond to the complaint and warn you that ignoring it could lead to a default judgment and the loss of the right to contest the claims against your business in court.
Notify Your Attorney Immediately
If the party or parties that sued your business did not serve notice of their lawsuit on your attorney, you should notify your company’s legal counsel as soon as possible. Because your company has a deadline to file a response to the lawsuit, contacting your attorney immediately will ensure that they can investigate the complaint and file a responsive pleading.
Suppose your company does not currently have an attorney you can contact. In that case, you can find legal counsel through various sources, such as directories maintained by state and local bar associations or third-party peer review services, or internet searches for business litigation attorneys. You can also contact other parties you know in business for referrals to business litigation lawyers with whom they have worked.
Inform Your Insurance Provider
Your business may have insurance coverage that applies to the claim(s) against the company. For example, your company may have commercial general liability insurance, property insurance, errors and omissions insurance, professional liability insurance, or directors and officers insurance. By notifying your insurance provider(s) of a lawsuit as soon as possible, they can help by extending coverage for legal expenses. Your insurer can also help you find legal representation if you do not already have an attorney. Furthermore, your insurance policy may require you to submit a claim to the insurer within a specific period to ensure eligibility for coverage.
Gather and Preserve All Relevant Documents
Receiving notice of a lawsuit may trigger your company’s obligation to implement a “litigation hold,” under which your business will preserve any potentially relevant records, in case the opposing party requests them in discovery. You should review your company’s records retention policies to ensure that you do not accidentally delete or destroy relevant documents. Losing such documents may expose your company to penalties in the lawsuit, including an obligation to cover some of the opposing party’s legal costs or the trial court’s issuance of an adverse inference instruction that allows the jury to infer that the missing information supports the opposing party’s claim.
Contact a Business Litigation Attorney
A lawsuit can cost your business considerable time, money, and resources, and taking prompt action is necessary to protect the company’s rights and interests. Understanding the steps your company can take in response to a lawsuit can put it in the best position to seek a favorable resolution. Contact Christensen Law PLLC today for a confidential consultation with a business litigation lawyer to learn more about the steps you should take when your business receives notice of a lawsuit.
