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WHAT TO DO IF YOUR COMPANY IS FACING A LAWSUIT

Posted by David Katz | Oct 20, 2019 | 0 Comments

A. THE LAST THING YOU SHOULD DO IS IGNORE THE LAWSUIT THAT IS NOW SITTING ON YOUR DESK.

Whether you or your company have been sued either by a vendor, client or another business the chances are that it will cost you both time and money to defend. Lawsuits are the last thing that companies need because, as a rule, they divert resources away from the bottom line. Notwithstanding, it is imperative that your company deal with any litigation in an efficient and timely manner by taking the following steps:

1. Make sure that you get an attorney involved immediately. It is absolutely imperative that the lawsuit papers ( which consist of a summons, complaint and attached documents, as examples) be provided to your counsel just as quickly as possible. You should never attempt to act as your own legal counsel in these situations. Once counsel reviews the court papers he will provide you with specific instructions as to what the lawsuit is about, potential exposure and maintenance of all data and records. Under no circumstances should you engage in any document destruction involving communications with the plaintiff until such time as this issue has been addressed with counsel. In certain cases. the situation may dictate that video images be taken in order to preserve the evidence. For example, in several cases where the Katz Law Group has defended national retailers on slip and fall cases,one of our first instructions to the client have been to video the area where the accident occurred and to procure as many witness statements as necessary. Preservation of the evidence is key. Your company technology specialists should be engaged to ensure that all emails, texts and electronic files are fully preserved as soon as possible.

2. Never, ever communicate with the plaintiff. It does not matter whether you had a great business relationship with the plaintiff. Your relationship with that client or business is, for all intents and purposes, now over. With that said, be sure to delegate any communications from the plaintiff to your attorney. 

3. Contact your insurance carrier or agent. Quite often, litigation matters may be covered under one or more of your business umbrella policies. It is imperative that you place your carrier on notice of any lawsuit as is required under your insurance policy and attach a copy of all of the court papers to the notice. You will likely receive a response from the carrier by or within 30 days as to whether the claims in the complaint are covered. If your claim is covered, then the insurance company will appoint its own lawyers to handle the matter for your company which includes the payment of your attorney's fees, court costs and any potential damages. On the other hand, you should never assume that your insurance company will absolutely cover all claims. You will still need to engage your attorney to review the case, contact opposing counsel and to inform plaintiff's counsel that the coverage for the claim is pending with your insurance company. If an extension of time is necessary to answer the complaint, your attorney can make a request with plaintiff's counsel or your attorney can file a motion to extend time to answer if necessary.

4. How are you going to respond to the complaint?  Once you are represented, you will need to thoroughly review the court filings with counsel to determine how you will answer the many allegations in the complaint. You will also need to discuss whether you will assert any affirmative defenses and or file a cross-claim and/or counterclaim in the action.

5. Consider settlement discussions as early as possible. Where litigation costs rise quickly you should consider exploring early settlement opportunities. Remember, the longer a case goes the more difficult and costly it becomes to settle. In today's business world, companies are more responsive to resolving cases at an early stage because they are concerned about the litigation costs and strategies to resolve cases at an early stage often focus, as they should, on whether you have a meritorious defense.

6. At all times stay focused on what matters most-your business. Your business needs your attention. Your only job now is to stay focused on running your business. Let your attorney handle the matter for you.  At the Katz Law Group, we have assisted hundreds of business of all kinds in dealing with this very situation. Please call us at 1-508-480-8202.

About the Author

David Katz

Attorney David S.Katz is the founder and managing partner of the Katz Law Group, P.C., located in Marlborough, Massachusetts...

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