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Important Steps to Take When Your Business Is Being Sued 

William B Hanley, Attorney At law Sept. 30, 2022

According to statistics compiled by The Zebra, a website that compares insurance companies and tracks business trends in the United States, anywhere from 36 to 53 percent of all small businesses nationwide are sued every year, and 43 percent are threatened with lawsuits annually. About 45 percent are currently involved in lawsuits, and 90 percent of all small businesses will experience at least one lawsuit during the course of their existence.  

If that much legal action is directed against small businesses, can you image the claims, threats and legal actions against America’s larger businesses, the ones that cut across state boundaries and employ thousands? 

If you’re going into business, thinking of it, or already operating your own business, you need to be prepared for the possibility of lawsuits. You not only need to put policies and practices in place to prevent legal action, but you also need to be aware of the actions you should take once a lawsuit notice is served on you and your business. 

If your business is being threatened with a lawsuit or has already been served in or around Irvine, California, contact William B. Hanley, Attorney at Law. Business Litigation Attorney Hanley has been representing business clients in the counties of Los Angeles, Orange, and San Diego since 1974, and he has been involved in almost every type of dispute imaginable. He will analyze your situation, respond to the lawsuit in a timely and aggressive manner, and represent you every step of the way to pursue the best result possible. 

Common Business Lawsuits 

Lawsuits against a business not only originate outside the firm from clients, customers, vendors, and even other businesses, but also from within from disgruntled current and former employees. Some of the legal challenges you might face as a business owner/operator include, but are not limited to: 

Premises Liability: Someone is injured on your property and makes a claim to recover medical expenses and other damages and losses. Though your commercial liability insurance should cover most such accidents, if the injured party is not satisfied with the settlement offered—or they’re seeking more than the cap on your insurance allows—you could be sued for the sum being sought. 

Breach Of Contract: If your company fails to deliver on something it has promised in a contract, you could be sued for breach of contract. Your commercial liability insurance will not cover breach of contract. 

Employee Lawsuits: Employees are protected against discrimination, harassment, retaliation, and wrongful termination by both federal and state statutes. Though government agencies are tasked with investigating employee complaints, either the investigating agency or the affected employee may end up suing you. 

Discrimination: If you operate a business open to the public, customers can also sue you for discrimination if you treat them differently because of a protected class they fall into, based on sex or gender identity, race, national origin, or religion. You need to treat all customers the same. 

Torts In General: You can also be liable for interfering with another business through false advertising or defamation, or through actual interference known as tortious interference. In this case, you take action to come between another business and its relationship with others. You may try to steal away a supplier, for instance. Trade secret theft, patent infringement, and trademark violations are also actionable.  

Cyber Security: If you keep customer or vendor data on a hard drive, or even in the cloud, and the information is stolen through hacking or internal actions, you may be liable for the theft of the data. 

Important Steps to Take When Your Business Is Being Sued 

The most important step is to seek legal counsel and representation. Very few business owners are attorneys and even when they are, they are better off being represented by a third party. Your next step is to take immediate action. Once you have been served notice of the lawsuit, you have 30 calendar days to file a response, or the plaintiff suing you may win a default judgment against you. On Day One, obtain an experienced attorney and fashion a vigorous response to meet the deadline. 

If you have insurance that provides liability protection for the acts or omissions for which you’re being sued, notify the company immediately. You need to know the extent of the services they are—or are not—willing to provide in your defense, and the cash limit on their liability for your particular tort. 

Together with your attorney, gather the available documentation and evidence pertaining to the lawsuit. If you need to interview employees, clients, vendors or others, your attorney should take care of that for you. Allow your attorney to pursue a path forward for you and your business. The last thing you want to do is interject yourself in the process and cause unforeseen legal consequences. 

What Not to Do If Your Business Is Being Sued 

When your business is facing a lawsuit in California, it’s important to leave things to your attorney and keep your mouth shut. Don’t go running off to the plaintiff or the plaintiff’s attorney and try to cut a deal or talk them out of the lawsuit. In the process, you may end up providing them with more fodder to win their case in court. You may even say or threaten something that could result in an additional lawsuit. While many lawsuits are settled out of court due to the costs and length of civil litigation, settlement negotiations are best left to attorneys representing the two sides of the issue. 

Rely on William B. Hanley, Attorney at Law 

Lawsuits don’t just disappear on their own. You have to respond quickly and decisively to them. The best way to do that is by relying on experienced legal counsel who has the knowledge and resources to mount an aggressive defense. 

If your business is in the Southern California area, contact William B. Hanley, Attorney at Law immediately. Attorney Hanley is a business litigation attorney who has handled cases large and small, helping his clients develop strong strategies to counter the lawsuits facing them. Reach out today to start building your legal defense.