Blog & Video

What To Do When Your Business Is Sued

Introduction

Imagine this scenario: You’re a business owner, working hard to make your enterprise thrive, when suddenly you receive notice that your business is being sued. It’s a daunting situation that no one wants to find themselves in, but it’s essential to act swiftly and decisively. In this guide, we’ll discuss what you should do if your business is facing legal action. Remember, time is of the essence!

Act Quickly

The first and most crucial piece of advice we can offer is to act quickly. Whether you’re a seasoned entrepreneur or just starting out, when a lawsuit comes knocking, there’s no time to waste. The specific timeline for your response depends on the type of court where the lawsuit was filed.

Federal Court Lawsuits

If your business is being sued in a federal court, you have a tight window of opportunity. You must file your answer or response to the pleading within 21 days. This may seem like a short timeframe, but it emphasizes the importance of promptly seeking legal counsel and getting started on your defense.

State Court Lawsuits in California

In the state of California, the rules vary slightly. If you’ve been personally served with the lawsuit, you usually have around 30 days to file your response or pleading. This gives you a bit more breathing room, but the process can still be time-consuming. Therefore, it’s crucial to make the most of this time by securing proper legal representation.

Why You Need Legal Representation

Now that you understand the urgency, let’s delve into why having the right legal representation is essential. Failure to respond to a lawsuit can lead to a default judgment against your business. In simpler terms, this means you forfeit your right to defend yourself in court, and the plaintiff can obtain a judgment that can be enforced, including the ability to seize your assets. Needless to say, you want to avoid this scenario at all costs.

Here’s how an experienced attorney can help:

Understanding the Legal Landscape: Legal jargon and court procedures can be complex. A skilled attorney will guide you through the process, ensuring you understand your rights and responsibilities.

Building a Solid Defense: Your attorney will help you craft a robust defense strategy tailored to your specific case. This can include gathering evidence, interviewing witnesses, and negotiating with the opposing party.

Negotiating Settlements: Sometimes, settling out of court is the best option for your business. An attorney can help negotiate a fair settlement that protects your interests.

Ensuring Timely Filings: Missing deadlines is a costly mistake. Attorneys are well-versed in the filing requirements and will ensure your responses are submitted on time.

In addition, during this process:

Avoid Direct Contact: Resist the urge to directly communicate with the plaintiff. Your words can be misinterpreted or used against you. Instead, let your attorney handle all communications to ensure everything is legally sound.

Organize Documents: Gather relevant documents, such as records, invoices, payroll information, and contracts, based on the complaint’s legal grounds. Create a checklist for organization.

Prepare and File Your Response: In California, you typically have 30 days to respond to a lawsuit once it’s filed. However, prior notices, like demand letters, can extend your preparation time. Your response should:

  • Address each specific issue in the complaint.
  • Present an affirmative defense, backed by credible evidence countering the plaintiff’s claims.
  • Be filed with the same court where the complaint was initially filed.
  • Be served to the plaintiff.

Ignoring the lawsuit is not an option, as it could be seen as an admission of guilt. If you fail to respond within the 30-day window, the court may allow the plaintiff to request a default judgment, which means an automatic win for them after an additional 30 days. So, it’s crucial to take prompt action and respond appropriately.

Conclusion

Facing a lawsuit can be incredibly stressful, but remember that you don’t have to navigate these turbulent waters alone. Seek legal counsel immediately, act swiftly, and protect your business’s interests. By doing so, you’ll give yourself the best chance at a favorable outcome. Don’t let a lawsuit catch you off guard; be proactive, be prepared, and secure the guidance of a qualified attorney.

At the Law Office of Parag L. Amin, P.C., we understand the challenges businesses face when dealing with legal issues. We specialize in business law and are here to assist you if your business is sued for any reason. Our experienced team can guide you through the often confusing process, calm your fears and frustration, and work tirelessly to protect your business’s interests. Contact us today for a consultation and let us help you navigate the path to a successful resolution. Your business’s future may depend on it.

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PLEASE NOTE: This is not a representation, warranty, or guarantee of a future result or outcome. Every case is different just like every one of our clients.