What should business owners do about a potential lawsuit?

On Behalf of | Dec 20, 2021 | Business Disputes, Business Litigation |

Owners have a long list of concerns, particularly in the current economic climate. While keeping the lights on (literally or metaphorically) and paying employees are at the top of the list, it is a mistake to ignore or not prioritize potential lawsuits regardless of its’ apparent validity. Disgruntled customers or a business partner often are the source of disputes or potential lawsuits. Still, business owners need to do something more than ignore it, even if it seems silly or petty, hoping that the problem will go away.

Preparing for a potential lawsuit

Regardless of the type of dispute or its financial implications, it is best to prepare. It starts by following these steps:

  • Stay calm: The courts quickly recognize cases that have no merit and will dismiss them and perhaps other them to pay the defendant’s legal fees.
  • Remain civil: Some people who threaten to sue are just looking for a fight, so avoid escalating the issue with fiery rhetoric.
  • Do a cost analysis: This should involve present-day damage and long-term fallout in not defending the company. Maybe it is better to pay and move on, but maybe it would leave the business open to future lawsuits. Weigh the two options or seek a third way.
  • Take the lawsuit seriously: Judges do not like to be ignored and could pile on additional legal problems if they choose.
  • Do not back down for serial litigants: Those who are known for multiple lawsuits of a single target can be labeled as vexatious litigants, which means that they need a judge’s approval to pursue legal action on the additional claims.

Is it time to make a stand?

Before making a final decision, it is often wise to consult with an experienced litigator who handles business disputes. They are legal professionals who understand these situations and often can protect the client’s interests to the full extent of the law.