Are you being sued? Are you facing a serious threat of a lawsuit?
Being on the receiving end of a lawsuit may inevitably be stressful at first. However, if you approach your defense step by step, with a plan that makes sense to you, you can resume command of the situation quickly. Your sense of peace should then return quickly, and you’ll be back on top of your game.
Here are a few pointers to guide your way. If you follow them, you will maximize your chances for a positive outcome.
This week – Steps 1-3
Step 1 – Check for Insurance
First off, check to see if any insurance policy you may carry – such as a business insurance policy or even a personal umbrella policy – might cover the costs of defending the lawsuit and/or indemnify you in the event of a judgment against you or your company.
If you are not sure whether your insurance may cover the risk, ask. If the risk is not covered, bringing a lawsuit to the attention of an insurance carrier will probably not cause your premiums to rise on unrelated matters. If your carrier does cover the incident, you may avoid significant expenses.
Be sure to report the claim to your insurance carrier as soon as you have notice of it. If you wait too long and/or litigation proceeds without the insurance carrier knowing about it, they may deny coverage.
Step 2 – Don’t Do Anything Foolish
Are you upset with an employee for filing or planning a discrimination claim? That’s understandable. But don’t even think about doing something about it at work.
Just as it’s often the cover-up that gets you, rather than your original offense, retaliation often invites far greater consequences than whatever the plaintiff alleges you have done wrong.
If in doubt, there is no doubt. Do not proceed without consulting an attorney.
Step 3 – Have a Plan – Strategic, Tactical, and Financial
On some occasions, insurance coverage will not be available to indemnify and defend you from possible exposure. When you or your company are left with the bill, it pays to know what you can expect, when, and why.
Many law firms have a habit of doing everything conceivable that can generate billable hours. This is the wrong approach. The first priority is to be effective. Your attorney should recommend particular steps that are most likely to be helpful to your defense; be sure to understand what is involved, when, why, and how much it will cost you. Defending a lawsuit is stressful enough without massive, unexpected bills at the end of the month.
Your plan should address:
- Investigation of the facts through independent (non-litigation) channels, before discovery, wherever possible.
- This includes checking with likely witnesses (for both sides), consultation with experts, and background investigations on the major players
- Information produced in investigation is often a powerful weapon in discovery
- Legal research and analysis into the claims plead.
- Do the claims meet the standards for pleading?
- Are the claims subject to particular defenses (lapse of statutes of limitation, absence of material facts needed to state claims)?
- Motion practice
- Are there any claims or requests for relief that can be challenged, to reduce the number and severity of threats the client faces?
- Requests those materials and ask questions that are reasonably likely to lead to important information. Asking the right questions is much more important than asking a lot of questions.
- Whom to depose, why, and in what order
- Budgeting for tasks to be completed, including third-party costs
- You and your attorney should agree up front what budget should reasonably be expected and required to defend a lawsuit effectively.
- Within a reasonable ballpark range, that figure should be allocated among the tasks most important to your defense.
- In all but the most severe situations, your attorney should not operate as though your wallet is bottomless. Poor planning can blow a client’s budget on excessive detail in preliminary tasks, leaving mission-critical tasks unaddressed.
Step 3 – Investigate the Facts
A number of lawsuits are filed without thorough and adequate preparation on the facts by the plaintiff or his/her counsel. There are number of “red flags” that may indicate this is the case:
- “Round” number for economic damages (indicated they’ve been guessed at)
- Damages “to be proven at trial” (sometimes legitimate – i.e. if not all damages anticipated have yet accrued but more are expected before trial)
- Statements made “on information or belief”
- Cases filed or served close to the statute of limitations
Such cases are often vulnerable to attack in motion practice or discovery. A reasonable investigation of the facts will let you know if that is the case. You and your counsel should consider a number of channels that may help you challenge the claims you face.
- Witnesses –
- Who are the players in the story? Who is friendly to you, and who is likely to help the opposition? Speak to the important players and get the story from them. Make a record if what they say that is important.
- Consult experts on causation, technical issues, and scope of economic damages if you have enough data to make an intelligent assessment possible
- Public Records
- Under some circumstances, searching publicly available records may yield useful information (i.e. when the opposing party is suspected of having a criminal history).
- Social Networks
- Private citizens, as well as some companies, are often far more reckless than they should be about private matters on social networks.
- Social network information is generally subject to discovery, but an opposing party’s statements about the case can sometimes be gleaned from social networks.
- Private Investigators (PI’s)
- The old standby, but sometimes effective. If the opposing party is accused of exaggerating damages, asset searches and other investigative channels can be an important source of vital information.
In using both social networks and PI’s, it is vital to follow privacy laws. You don’t want any additional claims on your hands.