lawsuitFor any business owner, a potential lawsuit is a distraction and a hassle. If you find yourself in a situation in which you’ve been served with a lawsuit, it’s important to take action quickly to best protect you and your company.

Defending yourself from the claims made in the lawsuit could become an expensive and time-consuming process if you are not properly prepared, so taking immediate action will increase your chances of achieving the best possible outcome.

The following are a few steps you should take right away after being served with a lawsuit related to your business:

Contact your attorney: All business owners should have a relationship with an experienced attorney who they can turn to in such situations. As soon as you receive notice of a lawsuit, get in touch with your business lawyer. There are going to be a number of important deadlines you must meet and other steps to take. A failure to meet these deadlines could damage your chances of successfully protecting your company, even if you believe the lawsuit lacks merit. An attorney can help you sift through your responsibilities and meet all of your deadlines.

Contact your insurance agent: Your insurance plan should cover lawsuits involving your business, which will be a significant help in removing some of the costs associated with addressing legal issues. If you do not notify your insurance provider quickly, you could lose your right to coverage, whether it’s paying for a claim or for the costs of obtaining legal defense.

Begin gathering information: Arming yourself with information and documentation is one of the best ways to ensure your success in a lawsuit. You have almost certainly had prior dealings with the party filing the claim, so find all information and records you can about your dealings with the plaintiff, gather any potential witnesses and collect written accounts of the circumstances that led to the suit and share all information with your attorney as soon as possible so that you can put together a solid plan of action.

Attempt to settle out of court: Try to resolve the dispute outside of the courtroom, if at all possible. Options include mediation, arbitration, neutral evaluation and settlement conferences. Procedures differ for each process, but all of them take significantly less time and cost significantly less money than a full-on court case. Evaluate all options available to you, and speak with your attorney about what might work best for you.

Being involved in litigation is never ideal for a business owner, but with sound preparation and taking the proper steps right away, you can protect the company you’ve worked so hard to build and grow.


Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Litigation Practice Group at BoltNagi, an established and well-respected civil litigation law firm serving individuals, businesses and organizations throughout the U.S. Virgin Islands.