A lawsuit filing against your business can be unsettling. A prudent business owner always tries to mitigate risk; however, some situations are unavoidable. Often with success comes litigation. How you handle the next steps after your business is sued is critical.
Being sued does not mean your business will ultimately be found liable. Rather, a complaint is just a piece of paper with unproven allegations. Once a lawsuit is filed, the complaint generally must be served on the business to trigger the time to respond to the allegations. However, if you learn of a lawsuit filing do not wait to be served. Instead, you should start to consult with attorneys, as set forth below. This will avoid delays in getting your strategic planning in order and put you ahead in the litigation.
What To Do After Being Served
If your company has just been served with a complaint, take a moment to understand what steps you should take next. Acting quickly and deliberately is key to handling the situation appropriately.
After you have reviewed the complaint, you should immediately take steps to engage the right attorney to assist you. This should be an attorney experienced in the area that is the subject of your lawsuit. Do your research and ask around. Interview several candidates in person or via video to ensure you choose the right attorney for you and your business.
Hiring legal counsel is critical. Your attorney evaluates the claims against your business and decides on the best course of action. Whether drafting an answer to the complaint or filing a motion to dismiss, your attorney ensures that all filings are timely, accurate, and compliant with court rules.
Legal counsel also assists with gathering evidence, interviewing witnesses, and preparing a defense should the case proceed to trial. They manage communications with the plaintiff’s attorney, which helps to avoid unnecessary conflicts and ensures that the process is handled professionally. Lawsuits can be very costly for your business, both financially and operationally. Engaging an attorney early can help minimize disruption and protect your company’s interests.
Initial Procedural Steps of a Lawsuit
In New York, you typically have 20 to 30 days from the service of process to respond to a complaint, depending on how you were served. Ignoring the complaint or delaying your response may result in a default judgment against your business. This means you will be deemed liable and a judgment entered against your business for your failure to respond to the complaint. While default judgments are not favored under the law, they may be granted if there is a delay in answering. Once a default judgment is entered, challenging the judgment is difficult and costly. A default judgment may negatively impact your business. So it is important to contact an attorney right after being served to discuss the next steps and ensure a timely response.
The complaint outlines the claims against your business and what relief the plaintiff seeks. These could include damages or specific actions. After reviewing the complaint, you and your attorney should plan a path forward to resolution or defense of the litigation.
You have several options in responding to a complaint which include filing an answer or moving to dismiss the complaint. A motion to dismiss may be brought for several reasons, including for example the statute of limitations, lack of jurisdiction, and failure to plead an allegation under the law. Also, consider whether it’s worth attempting to settle the action from a potential liability and cost aspect.
In addition to handling the procedural aspects of the case, legal counsel helps you understand the risks and potential outcomes. They can advise on whether it makes sense to fight the case in court, pursue a settlement, or explore alternative dispute resolution methods such as arbitration or mediation. Without proper guidance, you could miss opportunities to resolve the case early or risk having the court rule against you.
Understanding which strategy is appropriate depends on the nature of the lawsuit. This is where seeking legal guidance becomes critically important.
Take A Step Toward Safeguarding Your Business
If your business has been sued, the most important thing you can do is act promptly to retain counsel and understand your rights. Delaying action can lead to costly consequences. At Rodriguez-McCloskey PLLC, we understand the challenges a business faces when defending against a lawsuit. Schedule a 30-minute consultation today to discuss your case and explore the best options for protecting your business.
