Is your company involved in a contentious business dispute in Troy or elsewhere in Michigan? If so, you could soon find yourself the target of a lawsuit. Here’s what you can do to put your business in a strong position to succeed in the face of commercial litigation, and why it’s so important to get help from an experienced business lawyer.
Do Not Ignore the Complaint and Summons
In the event your company receives a complaint and summons in a lawsuit, do not simply ignore the situation and hope it goes away. Instead, you should review the complaint carefully to identify the plaintiff(s) who have sued your company and understand the nature of the plaintiff’s claims and their allegations against your company. The summons will also state how long you have to file responsive pleadings. If you fail to file an answer by the deadline indicated in the summons, the case could receive a default judgment against your company, in which the court grants judgment to the plaintiff regardless of any defenses your company may have against the plaintiff’s claims.
Notify Your Attorney Immediately
Next, you should notify your in-house legal counsel or an outside law firm about your case. Doing so can help you preserve any defenses or claims your company may have by asserting them in a timely responsive pleading. An attorney will need copies of the complaint and summons, as well as the contracts, communications, or other documents underlying the case.
Preserve All Potentially Relevant Evidence
After receiving notice of a lawsuit, you should implement a litigation hold in your company to preserve potentially relevant evidence. A litigation hold should involve suspending your company’s routine data-deletion or document-destruction practices. Failing to implement a litigation hold could lead to the destruction of potentially relevant evidence, which could result in sanctions against your company. This could in turn lead to an order to reimburse the plaintiff(s) for legal fees or a spoliation instruction at trial, which allows a jury to infer that the destroyed evidence was unfavorable to your case.
Notify Your Liability Insurance Carrier
You may have insurance coverage for the claims in the lawsuit, such as:
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General commercial liability insurance
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commercial property insurance
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Products liability insurance
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Professional malpractice insurance
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Directors and officers insurance
Insurance can also help pay for your company’s legal expenses in the case. However, insurance policies typically require notice of a claim within a specific timeframe to secure coverage, so be sure to alert your provider right away.
Avoid Contacting the Opposing Party Directly
Cease all direct communications with the plaintiff, as any unguarded or unadvised statements you make to them could hurt your company’s case. Instead, you should allow your law firm to handle all communications related to the case. Your legal counsel can handle potential settlement negotiations to resolve the dispute without the need for trial.
Assess Your Risks and Create an Initial Response Plan
Finally, your company should conduct an internal review to assess the potential operational, financial, and reputational implications of the lawsuit. The review should also identify employees who may have relevant documents and information, as they may have to sit for depositions during discovery. Your company should also develop a response plan that facilitates coordination among all stakeholders in your legal case, including corporate leadership, in-house counsel, outside counsel, and compliance teams.
Contact Our Firm Today for Guidance and Support
The sooner you take legal action, the better. Contact August Law, PLLC today for an initial consultation with an experienced commercial litigation attorney. We’re proud to serve clients across Michigan from our offices in Troy, and we would be happy to explain in detail the steps your company might need to take after receiving notice of a lawsuit.