You’re Damned if You Don’t Face Lawsuits Head On

Posted: June 17, 2013 in Uncategorized

Lawsuits happen. That’s true for any successful business, even if you take my litigation-avoidance advice in this blog. While you cannot prevent all lawsuits, there are steps you should take to minimize the damage and headache when the summons and complaint arrive at your office door. In fact, if you know that the lawsuit may be coming, you can do some of these things before you are served with the lawsuit.

 

First, train your office staff on how to deal with deputy sheriff’s and process servers who come calling. This may seem like a no-brainer, but companies get defaulted and pay large judgments because a receptionist put court papers in the circular file. You normally have only 20 days to respond to a lawsuit. Sometimes that time can be greatly reduced by a judge’s order, so it’s important that you get and read the documents right away. Conversely, if the suit papers are directed at an owner personally or an employee, there may not be any obligation to accept them, or to call the individual to the front to be served. Each situation is different, so discuss this with your lawyer.

 

Start making phone calls. You know I am going to tell you to call your lawyer asap. That’s not just self-serving. Your lawyer can advise you on what other steps to take. She can also quickly find out what is happening at the court by checking the docket, and can contact opposing counsel if need be. You should also notify your insurance carrier. You may have be pleasantly surprised to learn that you have some coverage. Keep in mind that your insurer may defend the case pursuant to a “reservation of rights.” This means it can try to disclaim coverage later, or it might only cover the costs of defense. In Massachusetts, this also means that you can pick your own lawyer rather than using the insurance carrier’s lawyer. Although some insurers are loathe to tell you this, when they defend under a reservation of rights in Massachusetts, you can pick your lawyer and the insurer will pay reasonable attorney’s fees.

 

Put your normal document destruction/retention policies on hold. You have an obligation to save relevant paper and electronic documents that may be related to the claims and defenses. In my experience, a missing document can be more problematic than an unfavorable document. The jury will always think that you intentionally destroyed a document and will, usually with the judge’s blessing, use it against you. It’s human nature to think that the missing document would be a lot more important than it really were if it were produced.

 

You and your attorney may want to start investigating the facts as soon as possible. There are certain strategies, within the bounds of ethics, to pin down certain witnesses before the other side obtains their depositions or otherwise speaks to them. I’m not going to give up all the tricks of the trade here.

 

Finally, come up with a strategy to defend the case. Lawsuits can sometimes be like a game of chess. If you and your attorney can think through the case from start to finish, predict your opponent’s moves, and plan your own moves and counter-moves, you’ll put yourself in a better position to win.

Don’t take a defeatist attitude.  Think of getting sued as part of the cost of doing business.  Approach it head on like any other business problem.  With some planning and some smarts, you may be able to minimize the distraction and damages.

By Adam P. Whitney

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