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It does not matter if you have a small, medium or large enterprise; as a business owner, getting a lawsuit for the first time can be paralyzing. Whether it has been filed by a competitor company, an employee, a supplier or client, lawsuits are very expensive to the company. As much as some of the allegations may be untrue, the consequences can be stressful. From the anxiety to the fear of the unknown and uncertainty surrounding the lawsuit, a business owner may be overwhelmed on what to do once the devastating news reaches them.

On that note, below are some of the steps to take the moment you confirm that your company has a lawsuit filed against it.

  • Have a sit-down with your lawyer

Before you go out and give a press conference or before you start calling the plaintiff seeking answers, review the case with your lawyer.

I own a successful IT Company and a few years back I was sued by a client. The first thing me and my cyber security lawyer did was to thoroughly go through the paperwork to make sure all the information on the lawsuit had a basis. Wherever we found discrepancies, we were sure to note them down as highlight the issue when we responded.

Additionally, my open source counsel advised me to preserve all records or documentation that had anything to do with the case.

  • Do not talk to the plaintiff; at least not directly

Trust me; the first thing your lawyer or advisor will caution you against is speaking to the plaintiff. This is because anything you say to them after you have been served will be used against you in a court of law.

In my case, once I had thoroughly reviewed the lawsuit and was well conversant with the finer details of the case, is when my data breach lawyer California allowed me to speak to the plaintiff’s attorney.

Note I said, plaintiff’s attorney. Direct communication to the plaintiff is forbidden because the time to settle things amicably was long gone the moment they filed the case against you or your company.

  • Inform your insurance provider of the lawsuit

Walk into any insurance company as a business owner and an endless list of policies that promise to safeguard your business’ interests are presented to you. If you happen to have taken one of those covers and your lawsuit falls under it, most often than not, the benefits may settle attorney and court fees as well as the settlement you will be liable to pay the plaintiff.

  • Decide how to proceed

Once your company has been served with a lawsuit, a limited duration is given where you will be required to respond to the suit. You will be expected to admit or deny the claim, decide whether the case should go on trial or opt for an out-of-court settlement. Additionally, you will be required to properly plan your defenses.

Before making any of the above decisions, your attorney should explain in-depth the repercussions any of those decisions will have on your company.

All in all, make sure to keep your head high and not let one incident demoralize your entrepreneurship spirit.

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