Litigation is inevitable for most businesses in Arizona, so it’s likely that at some point your business will be involved in a lawsuit — either by suing someone, or being sued. Disputes can arise between a business and a competitor, customer, supplier, partner, or current or former employee.
Whatever the case may involve, it is essential that you address any lawsuit filed against your business and meet all required deadlines; lawsuits don’t just go away by ignoring them. Proactively addressing the lawsuit early and head-on can help you avoid a disastrous outcome for your business. Here are eight tips on surviving a lawsuit:
Be sure you’re being sued.
Before a suit is ever filed, a business may receive a Demand Letter or Cease and Desist Letter that is basically a warning shot across your bow. Since the language in these letters is serious, you may panic and assume a lawsuit has been filed against the business. If you have received one of these letters from a law firm, you have not been sued (yet). If you receive a court-stamped copy of a complaint that is dated and contains the names of the parties and the court, then you know you are being sued.
After your business is served with a lawsuit, you have 20 calendar days in which to file an answer to the lawsuit or other motion with the Clerk of the Court and pay the required fee. If you fail to do so within this 20-day period, the other party can ask for a default judgment against you. If granted, the judgment will allow the other party to begin collection proceedings against your business. Delaying your response will put you at a serious disadvantage since your attorney will need time to review the suit, talk with the opposing attorney, and develop your response.
Find an attorney.
You don’t want to hire just any attorney; you want one with extensive litigation experience in handling cases similar to yours. Read our guide on hiring a business litigator.
Don’t contact the opposing party.
You may think you can work things out on your own, but if someone has gone to the trouble and expense of filing a suit against you, that is unlikely. Contacting the party suing you can hurt your case as you may say or do something that helps them and hurts you. Let your attorney handle all communications with the opposing party.
Decide on what you want to accomplish.
Deciding what you want to happen will set the strategy for responding to the lawsuit. Do you just want it to go away? Do you want to stand your ground? What are the considerations for protecting important company information? How much can you afford to spend? Is insurance a factor?
Decide on your budget.
Talk with your attorney to get an estimate of how much the lawsuit is likely to cost and when funds need to be made available so you can budget accordingly. You may need to take out a line of credit or investigate the possibility of litigation financing.
Don’t try to handle things on your own.
Do not try to handle the lawsuit or settlement yourself. You may think you know what you are doing, but when it comes to the law, you really don’t. You may say something that could come back to haunt you in this case or future litigation. Hire a lawyer and let him or her do their job.
Contact your insurance carrier.
Most insurers require that you notify them within a few days after you are notified of a lawsuit. Getting your insurance carrier involved early is important so you know if they will pay for your defense and if there are stipulations attached to their agreement to cover your case.
Williams Mestaz, L.L.P., has the experience and reputation that you want when you are dealing with a business-related lawsuit. We are here to obtain the best possible outcome for your situation. Do not hesitate to contact Williams Mestaz, L.L.P., at (602) 256-9400, and see how we can help you resolve your legal matter.