The ABCs of Business Litigation: What to Do When You’re Getting Sued
For many business owners, the prospect of facing a lawsuit is as unsettling as navigating through a maze in the dark. You know you must move forward, but each turn holds new challenges and uncertainties. While I cannot turn on the lights in this metaphorical maze for you, I can certainly provide you with a roadmap that illuminates the key aspects of business litigation.
The Initial Shock and Immediate Steps
Let’s say you’ve just been served with a lawsuit. The initial feeling is often one of shock, perhaps even disbelief. Regardless of your emotions, time is of the essence. The clock has started ticking on your deadline to respond, usually within 20 to 35days depending on your jurisdiction. First and foremost, contact an attorney specialized in business litigation. Hand over all the relevant documents, such as contracts, correspondence, and any evidence that can help shape your defense.
Example: Imagine you run a tech startup and a former business partner is suing you for breach of contract, claiming he was promised a larger share of profits. Your first step should be to collect all communications and contracts related to this claim and consult with a legal expert.
Understanding the Process: From Complaint to Discovery
A lawsuit is initiated with a “complaint,” outlining the plaintiff’s allegations and demands. Your attorney will prepare a “response,” and may also file counterclaims, turning the legal tables on the plaintiff. After these initial exchanges, both parties move into the “discovery” phase, where they share evidence and information. Discovery can be a slow process, often involving depositions, document requests, and interrogatories (written questions requiring written answers).
Example: In the case of your tech startup, you might use emails or text messages exchanged with your former partner as evidence. These communications could show that there was never a formal agreement on profit-sharing, which could weaken your partner’s case.
Settlement Talks and Courtroom Drama
Most business litigation cases never make it to trial; they are settled outside of court. Settlement is often a more efficient and less expensive way of resolving a dispute. However, if settlement talks stall, prepare to go to court. Trials are unpredictable, time-consuming, and expensive, so weigh your options carefully.
Example: Your former partner initially demanded a large sum, but after reviewing the evidence during discovery, he becomes willing to negotiate a more reasonable settlement. Here, both parties might find it beneficial to avoid the uncertainties of a trial.
The Verdict and Beyond
If you do go to trial and the verdict is not in your favor, all may not be lost. In certain situations you can appeal the decision, although this is another lengthy and expensive process. It’s crucial to consider the long-term impact of litigation on your business, both in terms of finances and reputation. Always consult your attorney for tailored advice on whether to pursue an appeal.
Example: The court rules against your tech startup, ordering you to pay your former partner a significant amount. You may appeal if you believe that there was an error in the legal proceedings that could change the outcome of the case.
Navigating the Maze with Professional Help
Lawsuits are intricate mazes that require expert navigation. While this blog post offers a roadmap, remember that every case is unique, and a one-size-fits-all approach will not suffice. Consult a specialized business litigation attorney to discuss the specifics of your situation.
Always seek professional guidance, as the stakes in business litigation are often high and the pathways laden with complexities that require expert navigation.
If you would like more information about this post or if you want to discuss your legal matter with an attorney at the Law Offices of Peter J. Lamont, please contact me at firstname.lastname@example.org or at (201) 904-2211. Don't forget to check out and subscribe to our podcast and YouTube channel. We have hundreds of podcasts and videos concerning a variety of business and legal topics. I look forward to answering any questions that you might have.
DISCLAIMER: The contents of this website and post are intended to convey general information only and not to provide legal advice or opinions. The contents of this website and the posting and viewing of the information on this website should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. Nothing on this website is an offer to represent you, and nothing on this website is intended to create an attorney‑client relationship. An attorney-client relationship may only be established through direct attorney‑to‑client communication that is confirmed by the execution of an engagement agreement.
As with any legal issue, it is important that you obtain competent legal counsel before making any decisions about how to respond to a subpoena or whether to challenge one - even if you believe that compliance is not required. Because each situation is different, it may be impossible for this article to address all issues raised by every situation encountered in responding to a subpoena. The information below can give you guidance regarding some common issues related to subpoenas, but you should consult with an attorney before taking any actions (or refraining from acts) based on these suggestions. Separately, this post will focus on New Jersey law. If you receive a subpoena in a state other than New Jersey, you should immediately seek the advice of an attorney in your state, as certain rules differ in other states.