Lawsuits have sometimes been referred to as a root canal without a pain killer. So, unless you’re a law firm, lawsuits and even the threat of being sued rank low on the business list of fun things to do. Yet given our litigious society, it’s highly likely that you will be involved with a lawsuit at some point during your business career.
Doesn’t it make sense to be prepared?
The seeds of litigation get planted in numerous ways. It could start as a customer complaint. It could land on your desk as a demand letter from a customer, a vendor, or some other third party. Or, it could start as a phone call or surprise inspection from a government agency. The common thread between them is that they often cause us to get defensive and trigger an adrenalin charged fight or flight response.
Sometimes the complaint has merit. Sometimes it doesn’t. Either way, smart companies know the litigation risk must be properly managed.
Yesterday I had the privilege of chatting with attorney Kathy Lang, a member of the Dickinson Wright law firm, about the subject of what to do if you think you’re going to get sued and she had a number of thoughts on the subject to help cooler heads prevail. I offer two of those ideas below for your consideration below.
1. The first and most important thing you can do when faced with a suit or threat of a suit is to investigate what happened. Good information is the basis of informed decision making. You therefore want to identify who the key players are that have information about the threatened suit and find out what’s going on.
“Gee Hanna, that sounds like common sense,” you might say.
Yes, it is. But it is easy for a company to wrap itself up in a mantle of self-righteousness and swat the complaint away like some pesky mosquito. “We wouldn’t do that,” they say and as a result complaints are ignored or maybe responded to with a perfunctory party line, the gist of which is “you’re wrong, go away.”
Sometimes that kind of defensive posturing works, but many times it doesn’t.
That’s why step number two is so important.
2. Preserve the evidence. Maybe you’re absolutely right and a complaint is without merit. But if the situation escalates, how are you going to prove it? Without good documentation it turns into a we said/they said situation.
A case may go to trial more than a year after it’s filed. Memories can fade, documents can be hard to find and witness can scatter by moving to another company, out of state, or retiring. Putting a hold on any regularly scheduled document destruction and getting statements from witnesses while memories are still fresh can go a long way toward being able to tell your side of the story if the situation continues to escalate.
A lot of time and money is spent these days on litigation discovery disputes thanks in large part to electronic documents. In the pre-Internet days of carbon paper more communications were conducted face-to-face. Today they’re facilitated through a wide array of electronic gadgets that memorialize the events electronically. Thus is born the “electronic document.” Now all that “stuff” needs to be produced in lawsuits. It’s incredibly expensive and time consuming, not to mention that not having some electronic blip when you should, can chew up a huge amount of your litigation budget.
There’s no one-size-fits-all way to conduct an investigation. It can be conducted internally, or with the assistance of counsel. One benefit of having counsel assist you is that you may be able to take advantage of the attorney-client privilege which allows you to not disclose certain types of information. Another benefit of touching base with an attorney if you think you’re about to get sued is that they’ll be able to advise you about the types of information (evidence) you’ll need to for a successful defense.
Think of it as an investment in peace of mind that frees you to focus on the growth and success of your business.