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You're Being Sued: Now What?

Published on Sep 10, 2013


Being sued? Here are four best practices to keep in mind and some preventative steps you can take to limit your exposure to litigation.
No one incorporates a company or successfully grows their business without a few bumps in the road – mistakes will be made and problems will come up along the way. When it comes to litigation, however, mistakes can be very costly if you are not prepared. Owners of small business incorporations certainly do not want to think about the possibility of being sued, but litigation can happen, taking you by surprise….and what then?Avoid a Lawsuit Here are four best practices to keep in mind if you are ever sued: 1. Do not ignore the lawsuit. If someone is going to the trouble of suing you, it is very likely they will simply disappear just because you may think the suit is frivolous. Ignoring the issue is only delaying the inevitable, and will only make things worse. 2. Seek legal counsel. Lawyers may be costly; however they are experts in the law, while you are not. They can evaluate your case without emotion and advise how to best proceed in order to protect your incorporation and assets. 3. Collect and organize information. Pull and document all records you may have related to the suit, including copies of contracts, emails, receipts, phone bills and calendar entries. Set them together aside from other paperwork, so that you can refer to them easily and quickly. If you have not been documenting information up to this point, begin doing so immediately. 4. Look at the big picture. Ask yourself, how could this suit impact your incorporated company and reputation? What damage will be done to my brand and to my bottom line if this goes to court? If we settle out of court? You may want to fight a suit at all costs if you feel it is unjust, however if it costs you significantly long-term, you may want to explore other options. Alternatively, going to court could cost more upfront but still be the best tactic to protect your brand. Ultimately, prevention is the best defense against a lawsuit. Be aware of the business incorporation laws of your state and town as well as be informed about regulations regarding employees, codes and taxes. Just as important, make it your responsibility to stay current on those laws. And if you do get sued, refer to the tips above as your “go to” plan. Good luck!