Preparing for a Business Lawsuit in California

Disputes can and do happen when you least expect them, irrespective of the size of your business. A lawsuit can emanate from a vendor, customer, employee, or business partner. Whether you are being precautious or your business is being sued, winning begins with thorough preparation. When well prepared, you can eliminate the stress of going to court and settling the dispute confidentially and possibly reduce your legal fees. Here’s how you can be ready to save money, time, and your reputation.

Report to Your Insurance Company

If your business has general liability insurance that may cover all or part of the dispute, report potential claims to your insurance carrier as soon as possible. This can help determine if the coverage applies to your case, if you need a more specific type of coverage, and how legal representation will be carried out.  

Gather Evidence

When facing a business lawsuit, preserving as much evidence as possible is crucial to building a strong defense strategy. Ensure that the information is accurate and avoid fabricating details; the court may impose severe penalties if you’re found to have engaged in fraudulent activity. Start with a list of all possible evidence you may need, such as correspondence, contracts, records, photos, and invoices. Then, check the evidence available in your archive and what is missing so that you can find ways to access it.

Seek Legal Counsel

To safeguard your business and improve the chances of a favorable outcome, it is imperative to consult with a business litigation attorney experienced in the type of dispute you are facing. Their expertise in handling disputes and understanding your industry can provide valuable support throughout the process. With legal counsel, you gain:

• Assistance in thoroughly investigating the claim
• A strategic approach that weighs defense costs, potential damages, and the likelihood of success
• Insight into whether pursuing a trial or a settlement is the better option.

Limit Communication With the Opposing Party

While trying to “work things out” with the other party through emails or phone calls may be tempting, it is best to avoid communicating with the other party unless your attorney approves. Engaging further with someone who has already filed a lawsuit can unintentionally create evidence that may be used against you. Remember, anything you say can be admissible in court and potentially harm your case. Additionally, pay extra attention to whom you mention the matter because privilege exists between you and your attorney, but it doesn’t apply to others. It is best to adopt a “no comment” strategy or explain that you and the people from your business are not at liberty to discuss the details of the lawsuit.

Consider Alternatives to Litigation

Litigation can be unpredictable, costly, and time-consuming. In most instances, it may be in your business’s best interest to explore alternative dispute resolution (ADR) methods like mediation or arbitration to resolve the issue. Your business litigation attorney can advise you on the benefits and drawbacks of these options and represent you during the settlement negotiations.

Maintain Business as Usual

The lawsuit could take years to resolve. However, you must protect your company’s and employees’ health by maintaining normal operations and compartmentalizing the dispute.

Let Our San Francisco Business Attorneys Help

If your business is being sued, contact our San Francisco business litigation attorneys at SAC Attorneys LLP to discuss your case and learn how we can help you.