As a small business, legal issues and lawsuits are rarely good news. Life can be tough enough battling it out in competitive industries, winning hard-fought customers and building truly valuable products and services.
The financial costs of legal trouble, even in cases where a case is won, can be significant enough on their own, but it doesn’t end there. Businesses associated with facing lawsuits lose trust from prospective customers and investors.
That’s not to mention the personal emotional toll it can take on a founder or owner to face a lawsuit head-on that directly challenges their reputation and business standards. In situations like this, where they simply can’t be avoided, you need to stay cool, calm and collected.
Lawyer up
Any lawyer will tell you that before you do anything, as a business receiving news of a suit made against you, you need to speak to a lawyer. Serious claims against a business like unfair dismissal might be foreseen but some cases can come from a wider pool of potential claimants, like personal injury claims.
Anyone from a vendor, customer, employee or other business could receive compensation for personal injury claims made against you and the costs of these kinds of cases can soar if negligence on your part is proven. Similar cases like alleged malpractice, tax issues or contractual disputes can be very costly if you don’t react in the right way from day one of being notified. Speak to your attorney or legal team as soon as possible for advice and review of the complaint.
Ensure You’re Insured
Once your lawyer is notified and is working on figuring out the intricacies of the case, your next port of call is to speak to your insurers, so they are fully aware of the situation.
Different policies cover different types of dispute, so you can consult initially to verify you’re covered for the claim. This conversation is often done in conjunction with your legal team as there’s no guarantee your insurers will cover the cost of the suit without question.
Make A Call
At this stage, assuming your legal team is able to defend you (if not, you’ll need to seek out a defence attorney to represent you, with experience of the types of claims you’re facing), it’s crunch time.
Typically, a defendant has between two weeks and a month to respond to a complaint with a response that features a few key points. These include admittance or rejection of liability, any counterclaims you want to make and whether you’d like to settle out of court (often the case if your legal team strongly believes you won’t win a case). Whatever you do, don’t ignore a complaint.
From this point, your best strategy is to be as open, honest and diligent as possible with your legal team and insurers. Your focus should always be on your business, and so letting them do their jobs without allowing yourself to feel as if the pressure is yours and yours alone is ideal for getting through a legal process unscathed.
At the end of day, you’re an entrepreneur at heart and your priority should remain helping your business thrive; remember none of that changes during or after legal proceedings have concluded.
