Receiving lawsuit papers can be a small business person’s worst nightmare. What do you do, and what can you expect in the process? Here are a few tips, derived from my 25-plus years of helping businesses deal with suits against them.
Hire the Right Lawyer
It may seem obvious that the first thing you should do is hire a good lawyer. What’s less obvious is who is the right lawyer for the job. That decision depends on what sort of suit has been brought against you because not all lawyers are created equal. Just because your neighbor or brother-in-law is a lawyer does not mean they have the experience necessary to deal with your particular issue. If they are trusted advisors, you may be able to count on them for a referral but don’t insist that they handle something that is outside their area of practice. When you get a referral, ask the person referring them whether the lawyer has handled similar cases in the past, and if so, how often. Ask those questions about the lawyer you’re considering hiring, whether you heard of the lawyer through word-of-mouth, found the lawyer online, or found the lawyer some other way. You wouldn’t ask your cardiologist to perform brain surgery on you, and you wouldn’t want to pay what those specialists charge if all you needed was stitches. The same principles apply.
In most court systems, you have twenty days to respond to a lawsuit. That isn’t much time, and it will take you at least a week to decide on the right lawyer, and for the lawyer to decide whether to take your case. At that point, a third of your time is gone. It may take another week for you and the lawyer to agree to fees. At that point, two-thirds of the time is gone. That doesn’t leave much time for the lawyer to file the basic papers to begin your defense. Fortunately, most courts will give the lawyer another 30 days, just for asking.
Don’t Throw Anything Away
Once you’ve been sued, and even if you have a dispute that you just think will result in a lawsuit, you have a duty to “preserve evidence.” Cases have been won or lost because a party failed to satisfy that duty. The “evidence” you will need to preserve is almost certainly broader than you would expect. To be safe, don’t throw away, or delete, anything that has anything to do with the party who has sued you, or that has anything to do with the general subject of the complaint. For example, if you’ve been sued in an employment case, don’t throw away anyone’s personnel files, or any versions of your employment policies, even if you’ve adopted new ones and payroll records. You get the picture.
Stop Deleting Emails and Other Electronic Data
Deleted emails, reused backup tapes, and wiped hard drives are the biggest reasons parties get in trouble with their preservation obligations. Deleted social networking posts and web pages can create problems, too. For people you know or suspect will be witnesses, have someone make an “image backup” of their computers right away.
Don’t Talk to or Email Anyone But Your Lawyer About the Suit
As they say in the warnings cops give suspects when they make an arrest, “Anything you say can and will be used against you in a court of law. Don’t talk to your best friend, your fiancé, your kids, your mom or dad, or anyone about the suit except your lawyer. You can talk to your spouse about it, but you probably should keep that to a minimum, too. Within your business, keep discussions to a minimum and limit them to the core management group that needs to know about the suit, and your board of directors, in board meetings. Avoid having even those discussions in email, if possible. Even if there’s nothing bad in those emails, your lawyer still has to look through them and may have to list them, and time is money.
Be Honest, Come What May
Some television depictions of the legal system might lead you to believe that it’s common for people to lie in court proceedings and that it’s expected, and on some level “ok.” It is not expected and it is not ok. People go to jail for it. Don’t do it.
Listen to Your Lawyer
Even if the lawyer is telling you something you don’t want to hear (like you’re likely to lose), you should listen. In fact, you should listen especially if your lawyer is telling you something you don’t want to hear. We, lawyers, want our clients to be happy, so they’ll keep coming back, so when we’re delivering what we know is bad news, it’s because we know that it’s best for you. If your lawyer tells you something you want to do in the case is a bad idea, it is. Remember, your lawyer, assuming you’ve hired the right one, has been through this process many times. You haven’t. You wouldn’t tell your brain surgeon how to operate, would you?
Have Realistic Expectations
Everyone wants to win a lawsuit, the party that brought it, and the party that has been sued. But the reality is that a very large percentage of civil cases settle because there is just too much cost and risk in taking cases all the way to trial. Most lawyers handling litigation are still paid by the hour, and a complex case can take hundreds of hours. The fact that your lawyer might talk to you about settlement doesn’t mean the lawyer isn’t on your side. It means the lawyer is looking out for your pocketbook.
You will no doubt want your lawyer to get the case against you dismissed quickly, but the reality is that the rules are designed to make sure that parties who sue get their day in court, or at least get a chance to gather evidence to show that they could win if there is a trial. While the civil rules call for a “just, speedy, and inexpensive determination,” in the legal system this doesn’t mean a month or even six months. Two to three years is closer to the norm, and that’s if there’s no appeal.
You may also want your lawyer to “counter-sue,” but unless you have a claim against the other party for something other than the fact the party sued you, that’s probably not a good idea.
Stages of a Civil Case
There are several stages in a civil case. In the first stage, the party suing files a “complaint,” and the party who has been sued files an “answer.” While the party who has been sued might file a motion to dismiss, a dismissal is not appropriate simply because what the plaintiff said in the complaint isn’t true. The Court will assume that everything in the complaint is true in deciding a motion to dismiss. Only if the plaintiff still doesn’t have a case, even with that assumption, will the Court dismiss the case.
If the case isn’t dismissed at the first stage, it will (probably) proceed to a second stage called “discovery.” In this stage, the parties get to ask each other questions, both in writing (interrogatories) and in person (depositions). They also get to see each other’s documents, emails, and other electronic information. Just because it’s the other side’s “burden of proof” doesn’t mean that the other side doesn’t get to see what evidence you have. You may not think it’s fair that the other side gets to prove its case with your information, but that’s the way the system works.
Once discovery is done, you’ll get another chance to tell the judge that the case should be thrown out without a trial in what is called “summary judgment.” At that stage, the judge will look at evidence that the parties have gathered or exchanged during discovery. He’ll then decide if there’s enough evidence that a jury could decide in the other party’s favor. Understand that the other party’s “evidence” includes simply the other party’s say-so, as long as the other party is willing to say it under oath. The Court will not decide who’s telling the truth at the summary judgment stage. That happens at trial, possibly with a jury.
Somewhere in the process, there’s likely to be something called “mediation.” This is just a facilitated settlement conference, where some neutral party tries to get both sides to see the weaknesses in their cases, and the strength in the other side’s cases, and come to a resolution. The mediator can’t decide the case at mediation, only the parties can do that.
If the case isn’t resolved at any of the stages above, there will be a trial, at which both sides get to present their evidence. It’s this stage, and only this stage, where a judge or jury will decide who’s telling the truth.
Litigation is a long, slow, expensive, and frustrating process, whether you’ve been sued or are doing the suing. And it’s not something you can just “turn over” to your lawyer. You will have to be actively involved, gathering evidence, giving testimony, and making decisions. It won’t be painless, but with an understanding of the process and the right representation, you’ll get through it.