In this article, we will look at 10 things you should consider if you are being sued, or you know it’s coming. While you will feel a range of emotions, there are ways to minimise stress and anxiety if you are being sued, and things you should do to protect yourself and your business.
Who can be sued?
Let’s start with who can be sued.
Whether you are an individual, business, organisation, or government, anyone can sue and be sued, with or without cause, and for many reasons including unpaid debt, defamation, or a breach.
10 things to consider when you are being sued, or know it’s coming.
1. Open communications
For business owners, it shouldn’t be a surprise they are being sued. Before being served court documents telling you that you are being sued, there are generally communications in the lead-up stages from a solicitor, a debt collector, or the suing party.
This could be a cease-and-desist letter, letter of demand, or notice of intention to sue, for example. So, you are aware that there is an issue that could lead to court action.
How you manage this stage is critical.
Having open communications at this stage could mean that the matter is resolved without it escalating further and the courts getting involved.
Not only will this save you time, stress, and money, it will also lead to a more amicable outcome between the parties.
For example, let’s say the matter relates to a breach of a trademark. A business owner has received a cease-and-desist letter. Regardless of merit, having open communications (with the help of a lawyer) could have the matter resolved and settled without the business owner being sued.
2. Don’t ignore it
Whether it’s at the lead up stage, or you have received notification that you are being sued, as tempting as it may feel to ignore it, don’t do it. You may think out of sight, out of mind, but there could be serious implications for ignoring it, and the matter could spiral out of your scope and control.
“Ignoring communications in the lead up stage could escalate to you being sued. And, if you ignore formal notifications that you are being sued, a default judgment could be entered against you.
It’s best to deal with the matter at hand and be proactive.”
3. Speak to a lawyer
Speak to a lawyer immediately, whether at the lead upstage or when you have received formal notification that you are being sued, and regardless of merit. This action will help protect yourself and your business.
Dealing with matters of this nature are outside the scope of many business owners, so speaking to an expert will provide peace of mind that the matter is being handled correctly (rather than guessing what you should do), and you will have clarity around next steps and possible outcomes.
4. Check the documents
Once the shock has settled, check the documents you have been served with are issued by a court. The document should have the name of the court and a court stamp, a court number, and details of what will happen if you do not respond in a certain time.
5. Keep a timeline
Keep a detailed timeline of dates you receive all communications, dates you need to respond by, and the dates of all responses.
6. Keep a record
You may be expected to remember details that were some time ago. So, start detailing everything about the matter that you can remember. This will assist you when communicating with your lawyer, when gathering evidence, and filing a response or defence.
7. Collect evidence
Compile evidence and make copies. Gather everything you feel is relevant so that you are prepared and can provide detailed instructions to your lawyer. This could include emails, documents, files, notes, or records.
8. Communicate only with your lawyer
There are certain communications that are confidential and others that are not and may be used as evidence. So, refrain from communicating with people about your matter.
If you have questions about who you can communicate with, ask your lawyer.
9. Don’t panic
Being sued can be stressful. That’s why it’s important to hire a lawyer that you trust, and who guides and advises you appropriately.
It’s important to know that matters can take a long time to resolve, so you should keep yourself in check, for your sanity and for the sake of your health and business. Be realistic, sensible, understand the possible outcomes, and prepare.
10. Take preventative measures
Take steps to reduce the likelihood of being sued in future, or being in a similar position. Use the experience as a lesson. This may include reviewing your business structure or financial situation, having comprehensive insurance, or having proper checks and balances in place.
Important disclaimer: The material contained in this publication is of a general nature only and it is not, nor is intended to be legal advice. This publication is based on the law as it was prior to the date of your reading of it. If you wish to take any action based on the content of this publication, we recommend that you seek professional legal advice.
Contract law is a key consideration in this current global climate and insofar as affects our Australian economy. Contract Law and COVID-19. Have you wondered whether legal and contractual obligations have been affected? The interesting, perhaps useful, contractual...
Force Majeure and Coronavirus (COVID-19) a global pandemic and the protective measures being taken by business, government and the nations across the globe. In this article we focus on the legal impacts in Australian business contracts as a result of the Coronavirus...
We’re delighted that AMK Law has been selected as Finalist in the Legal Service Category of Small Business Champion Awards 2020. AMK Law has been selected as a Small Business Champion Finalist from over 3,000 entries received this year. The Australian Small Business...