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Important steps to take when your business faces a lawsuit

Early in the stages of business preparation, you set out a list of things to do: Create a business plan, secure investors, find a location and hire capable employees. These are just a few matters you wanted to address.

Another important event it’s important to consider is having a plan in case someone or another business files a lawsuit against your company. What do you do when this happens? Stay calm, confer with trusted colleagues and respond with thoughtful and aggressive actions.

Discuss the lawsuit, contact an attorney

Here are some critical steps to take when your business faces a lawsuit:

  • Gather and discuss: Promptly discuss the lawsuit and its details with business partners, key employees and trusted business mentors and peers. You want to investigate every angle of this lawsuit and how your company will respond. Determine the circumstances that led to this lawsuit. Turning to colleagues is essential because they may help explain the situation and reveal certain details of which you may not have been aware. Assure this group that the conversations remain confidential.
  • Seek the advice of an attorney: A skilled attorney with a broad knowledge of business is the ally you need. He or she likely represented clients in similar cases that involved business litigation. An attorney will thoroughly study and review the lawsuit, determining whether the plaintiff has a valid case or is simply trying to gum up the legal system and harass you and your company.
  • Collect and assemble records: Documents represent supporting evidence that will help your company dispute the other party’s claims. Be thorough as the list may include contracts, invoices, letters, emails and electronic documents. Assemble these records chronologically as doing so will allow you to create a summary of events. These actions may trigger memories about this party along with your business dealings and experiences. Keep these records and do not destroy them.

Legal action always remains a possibility in the business world. Even if you do not expect a lawsuit, always be prepared for one. Preparation and a reliable plan are crucial.

Prepare for this challenge

As a business owner, you have overcome many challenges. A lawsuit is just one more challenge that promises to take some of your attention away from your business. Try to lessen that blow, prepare your team and prepare a response before it happens.


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