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Small Business Owners: How to Respond if You Are Sued

Charles BrecqueCharles Brecque
Last updated on:
June 1, 2022
Published on:
May 31, 2022

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No small business owner wants to be sued. However, it could happen to anyone at any time, so you need to be prepared.

You could be sued for things like breach of contract, slip and fall accidents, or discrimination, to name just a few cases.

In the event of a lawsuit, here are the key ways you should respond.

Review the Details of the Lawsuit

Firstly, when you receive notification about the lawsuit, it is vital that you review all the details of the suit.

Furthermore, you should review the details quickly. Do not put off reading the letter and documents you receive because most lawsuits have a narrow timeframe in which to respond.

Typically, you must respond within a few days or weeks.

Seek Legal Advice from an Attorney

The next crucial step is to get legal advice from an experienced attorney.

You should find a lawyer who has a background in handling lawsuits, but you may also want to seek out a specific type of attorney.

For instance, if the lawsuit involves tax issues, it is best to find a tax attorney, or if criminal charges are involved, you should get the support of a criminal lawyer, such as this excellent New Brunswick criminal defense attorney.

Going over the case with your lawyer will be the first step. Your attorney can help you understand your legal situation. He or she can then tell you whether the prosecution has a good case or whether the case is likely to be dismissed, due to a lack of evidence, for instance.

Your lawyer can then help you at each step of the way for the path you choose. For example, he or she could help you to reach an out-of-court settlement or represent you should the case go to trial.

Gather Relevant Documentation

Your lawyer will be able to advise you about which records and documents you need to gather to help your case.

You should then collect all records and documentation regarding the individual or entity that is suing you and provide the files to your lawyer.

The documents can then be used as an important part of your legal defence.

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Get in Touch with Your Insurance Company

In addition to contacting a lawyer, in many instances, you should also contact your insurance company.

For instance, if you are being sued for a slip and fall accident on your workplace premises and you have general liability insurance in place, which all small business owners should have, your insurer may be able to handle the case.

Begin by asking your insurer about the details of your insurance policy to fully understand what your policy does and does not cover and how your insurance company can assist you with the lawsuit.

Consider Settling

Your lawyer will advise you as to whether settling the case out of court is your best option.

Even if you do not believe you are in the wrong, it can often make sense to settle a lawsuit because fighting a case can cost a lot in legal fees; not to mention the fact that the outcome of a trial will be largely unpredictable.

However, there are times when it is best to go to court, especially when the other party does not have a provable case.

Settling could feel a little like giving up, but it is often the most strategic, least time-consuming, and most cost-effective method.

Just make sure you explore all your options with your attorney and weigh up the pros and cons of an out-of-court settlement before you decide how you want to proceed.

Things You Should Not Do

Just as important as knowing how to respond if you are sued is knowing the things you should not do if your small business faces a lawsuit.

Firstly, you should never ignore the lawsuit. If you do, it could have major repercussions. Ultimately, ignoring a lawsuit could cause a domino effect that results in your business closing.

You should also never contact the person or entity that is suing your small business. If you do, you are less likely to win your case.

Finally, you should not let the lawsuit distract you from running your business on a day-to-day basis. Let your lawyer do the hard work so you can focus on maintaining and growing a thriving business.

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