« »

Friday, February 28, 2014

Slapped with a lawsuit: 7 things to do if your company is being sued

Having your company taken to court is an unpleasant experience but is something of a rite of passage for any corporation that gets big or achieves any amount of public attention. The problem is that as soon as you're seen to be successful, people will want a slice of that success and that can often mean a dubious lawsuit.

The other issue your business will contend with as you get bigger meanwhile is the simple challenge of scale. The bigger your company becomes, the more products and services you release, and the more people you employ, the more legal issues you can encounter and the more opportunities there are for you to slip up and make an honest mistake.

Whatever the case, this will likely feel like a personal attack on the company that you created and can result in a lot of money and time wasted. Your job though is not to feel sorry for yourself, but to prepare for the oncoming legal battle by preparing yourself and your organisation in these 7 ways…


Budgeting for a lawsuit
A good legal defense costs money
The harsh reality of a lawsuit is that it's going to cost you money. Even though you are the defendant and in all likelihood didn't want this lawsuit to happen, you're still going to have to shoulder half the cost until you manage to prove yourself innocent. Furthermore you are probably going to want to put some more money into marketing and PR to handle the media backlash, and you'll need to hire a law firm all of which costs money. Start budgeting now so that this hurts as little as possible.

Find a law firm

Legal advantage is ideal during a lawsuit
Expertise helps ensure positive results

The next thing to do is to find a lawyer or a law firm assuming you don't already have your own legal department. A lawyer will guide you through the process and give you the very best chances of coming out of the battle victorious. It's crucial that you contact the lawyers early in the process because they may recommend that you settle out of court, or have other advice that you can act on now.

Get your facts straight

It's also important before you make any big decisions that you ensure you know all the details and that you have these in front of you and ready to use if necessary. You may believe that you are in the right, but find when looking through old e-mails that actually you did mention X in the original agreement. It's crucial you have all the facts before going ahead, and that you look for any evidence that may weigh in your favour (such as CCTV footage if the case relates to a workplace accident).
Research the law to build a legal defense
Due diligence may add advantage

Do your research

You should also make sure that you research the law as much as possible pertaining to your case. This is something that a law firm can help you with, but you can start on your own by reading about similar cases and any potential loopholes etc. that may weigh against you or help you out.

Weigh the options

If you think you'll be able to settle out of court then you need to weigh up this option versus going through with the lawsuit. How much damage will this really do to you and your company? Again this is a good time to discuss with your lawyer, as there may be factors you hadn't considered. If you pay up for instance, it might make you a target for more lawsuits in the future.

Make contact

Either way it is worth contacting the company or individuals issuing the lawsuit. It may be that you are able to get them back down simply by showing them the evidence you have against them, or by explaining the potential outcomes if they lose. Alternatively you may be able to negotiate an agreement that suits both of you. This is a good time to think of the 'art of fighting without fighting' as Bruce Lee would call it, but again it's crucial to seek professional advice to avoid stirring the hornets' nest even more.

Have a contingency plan

As they say, you should hope for the best but plan for the worst. Should it all go wrong and you have to pull one of your products off the market, or pay a large settlement, how will you ensure you are able to carry on going strong without facing bankruptcy? Make this plan now so it doesn't catch you off guard should you need to use it.

About the author: This article is authored by Nick, a professional freelance blogger. He writes articles for Goldbach Law Group, a reputable bankruptcy attorney in Whittier. Nick uses his free time to indulge in reading and sports activities.

Images: Author owned and licensed