Let's face it, not too many New Jersey small business owners get excited about having to hire an attorney. The first thought popping into most people's heads when facing the prospect of having to deal with a lawsuit is, "maybe this is something that I can handle myself." But can you? Should you? Here is what you need to know.
Pro Se
When a party or individual represents itself in a legal matter, it is called "pro se" representation. Pro se is Latin for "for oneself" or "on one's own behalf." There are many reasons why someone would choose to represent themselves in a lawsuit. Based on my many years of experience in the field, I have come up with the top 6 reasons why.
1. They don't want to spend the money on an attorney;
2. They can't afford an attorney;
3. The case is so small that it would cost more to hire an attorney than it would to settle or defend him pro se;
4. A friend or family member told them that they should represent themselves;
5. They can't find an attorney to take their case; and
6. They believe that they can handle their case just as effectively, if not more, than an attorney.
Should You Be Pro Se?
The simple answer is "no," but it is not always the most practical one. If you find yourself unable to afford an attorney or if no attorney will take your case, you may have no option but to represent yourself. It is much better to try to represent yourself if you are a defendant in a lawsuit than it is to do nothing and have a default judgment entered against you.
However, if you can afford an attorney, you should hire one to represent you in a lawsuit. While it might seem easy to do, it is not. There are so many rules and requirements involved in handling a lawsuit, and you can't just make an appointment to see the judge to explain why you are not at fault for a particular situation. You need to know what you are doing. This is especially true if the other side has an attorney. Contrary to the beliefs of many, you cannot learn to be a litigator from the Internet.
New Jersey LLCs & Other Business Entities
While many people, for the reasons listed above, may opt to represent themselves in a lawsuit, a New Jersey business entity, including LLCs, are not permitted to represent themselves. Under New Jersey law, a business must be represented by an attorney in any New Jersey litigation. It cannot be represented pro se, by the owner, president or anyone else, unless that person is a licensed NJ attorney.
More specifically:
NJ Court Rule 1:21-1(c) prohibits, (With specific exceptions), a business entity other than a sole propriety from appearing or filing any paper “…in any action in any court of this State except through an attorney authorized to practice law in this State.” Therefore, corporations must be represented in court by counsel. See Globe Media Grp., LLC v. Cisneros, 403 N.J. Super. 574, 577 (App. Div. 2008); Olympic Indus. Park v. P.L., Inc., 208 N.J. Super. 577, 580-81 (App. Div.), certif. denied, 104 N.J. 453, 517 (1986). Rule 1:21(c) extends to all legal proceedings and, as such, requires corporations to be represented by counsel at mediations as well.
What Are the "Specific Exceptions?"
There are only limited times when a business can represent itself. The Court Rule refers to those situations as specific exceptions. Those exceptions when a plaintiff or defendant is a corporation, partnership, limited liability company, etc., and the claim is less than $3,000 (R. 6:11), when a partner in a general partnership is appearing pro se in a summary action for the possession of a premises (R. 6:10), and when a party is a Federal Government agency (R. 1:21-1(d)).
As you can see, the "specific exceptions" to the rule are very limited. The vast majority of lawsuits will not fall into the exception, and thus, the bar against pro se representation will apply.
So What Does this Mean to Your Business?
Simply stated, if you are doing business in New Jersey, and have the possibility of being sued (what company doesn't?), you need to be prepared financially and emotionally to hire an attorney.
It is no secret that we live in a litigious society. Thanks in large part to the Internet, people are more aware of their rights than ever before. If a customer, client, vendor, or consumer feels as though your company did something improper, it is easy to find a myriad of legal resources and information online, and even an attorney willing to sue your business. So, if you have a small business in New Jersey or are thinking of starting one, keep in mind that you will need to hire a lawyer to represent you if your company finds itself involved in a lawsuit.
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