The Five Essential Steps you must take if your Company is being sued

If your business is being sued either in the jurisdiction of England and Wales or any other jurisdiction, for whatever reason, you will receive notice of the legal action against your business.  There are five crucial steps you must take immediately to mitigate the situation.

Do not Ignore

However difficult you find it you must not ignore the situation.  Depending on the action against your firm there will be a limited amount of time to respond. If you miss the deadline to respond any opportunity to defend will be fatally flawed.  There are a number of legal procedures that a creditor may initiate

• If you receive a letter of claim for debt you have 30 days to respond if you dispute the debt, if you fail to respond the creditor can request a judgment in default and proceed with enforcement methods.
• If you receive a statutory demand you have 21 days to respond. In the absence of a response, the creditor may initiate winding-up or bankruptcy proceedings.
• Other types of legal procedures such as contract disputes, intellectual property breaches, regulatory breaches, negligence claims and product liability claims, once a claim form has been issued there is a period of 14 days in which to acknowledge a claim and a further 28 days to file a defence.

It is imperative that you contact an experienced litigation lawyer unless you concede the claim.

Take Independent Legal Advice

It is imperative from the onset that you are guided and advised by an experienced commercial litigation lawyer.  Responding to the claimant without the benefit of expert legal advice could have the potential to compromise your defence or ability to reach a settlement.  Ensure that your lawyer has expertise in the type of legal case you are facing, particularly if is a cross-border matter.  You must be advised by multi-jurisdictional lawyer who has a comprehensive understanding of the legal procedures and implications of both jurisdictions, who can steer you through all the options open to you.

Review the Claim

You may feel that you are completely justified in your stance in that you have no case to answer, however, frequently, once the matter has been set out it can become apparent that there is complete, or a degree of validity in the claim.  Your lawyer will scrutinise the claim and review your options.

Defence

If you are adamant that the claim is invalid and you wish to defend your position, depending on the nature of the legal action and under the guidance of your lawyer, you should assemble and collate all the documents relevant to the matter and identify all members of staff that have had involvement in the situation.   

Your lawyer will then work with you to develop a credible argument to refute the claimant’s contention.

Negotiated Settlement

If you concede that the claim has some degree of validity, after guidance from your litigation lawyer, you or your lawyer should contact the claimant with a view to reaching a mutually agreeable settlement.  This can be achieved in a number of ways; by means of straightforward negotiation between the parties or using alternative dispute resolution, (ADR) involving either mediation or arbitration. 

• Negotiation, you could make an offer of settlement such as staged payments

• Mediation is a confidential voluntary process, an independent mediator is appointed and both parties and their legal representatives attend an initial open discussion, followed by separate sessions with each party.  The mediator then attempts to develop a settlement acceptable to all parties.

• Arbitration is a similar procedure with an impartial arbitrator appointed to oversee the discussions however, an arbitrator can make a final legally binding decision once all the facts of the matter have been disclosed and each party has put their view of the matter.

The well-regarded commercial dispute resolution and litigation lawyers at Giambrone & Partners know how quickly a situation can unravel and impair and damage everything you’ve worked so hard to create.  Our lawyers have extensive experience in successfully managing such matters and delivering a solution or combating a claim.

If you would like advice regarding a legal litigation matter please contact us on clientservices@giambronelaw.com or click here.