What Should You Do if Your Business Gets Sued?

If you receive notice that your business is being sued, you must take prompt action – even if the allegations are without merit. Below are immediate steps to take in the event of a lawsuit notice.

Contact a competent attorney

Find a Texas commercial litigation attorney with a breadth and depth of experience in your industry and/or the area of law related to your matter. For instance, if the lawsuit concerns a contract dispute or delay claim in the construction industry, look for a construction litigation attorney with expertise in these types of disputes. If you are being sued by former employees for alleged discrimination or wage-and-hour violations, look for an experienced labor and employment litigation attorney. If your matter involves consumer products liability, look for a law firm who is well-versed in this area of the law.

Put your insurance companies on notice

Commercial insurance companies require that policyholders timely notify them of a lawsuit or, in many cases, an occurrence that may lead to a lawsuit. If you learn that your business is being sued, review all of your insurance policies and promptly notify a proper representative for each policy that may be relevant to the claim. Notice of claim should be given in writing, which should include a copy of the legal notice you received and other relevant information. The insurance companies will evaluate whether there is coverage under the policy and respond to you.

Gather and preserve relevant documents

Promptly collect and organize all documents that may be relevant to the lawsuit. For instance, this may include contracts, records of financial transactions, or records of communication between you and the party. Keep in mind that once you have been served with notice, you have a duty to preserve all evidence that may be relevant to the case. Destruction of relevant evidence, whether intentional or accidental, may adversely impact your case.

Meet all court deadlines

Once you are served with notice of a lawsuit, you have a certain amount of time to file an answer. For instance, for a typical case in county or district court in Texas, the deadline to respond is 10 a.m. on the next Monday after the expiration of 20 days following the date of service. Failure to respond to a lawsuit in a timely manner can lead to significant consequences, including the entry of a default judgment against you. Once the initial response is made, all subsequent stages of litigation will similarly have deadlines.

Develop a defense strategy

A good defense attorney can help you understand the nature of your lawsuit and guide you through the legal process. Your attorney will listen to your side of the story, assess your legal position, and work with you to develop an effective defense strategy. Depending on the situation and your goals, your attorney may advise you to explore mediation or a settlement to avoid the cost and reputational damage of a lengthy court battle.

Sheehy, Ware, Pappas & Grubbs assists clients in disputes touching virtually every industry in Texas. Whether the case concerns a multi-million-dollar dispute requiring complex, creative litigation techniques, or one requiring immediate injunctive relief, our goal is the same: to develop a cost-efficient and successful litigation strategy based on the client’s business goals. Contact us to arrange a consultation with a civil litigation attorney.