How to Prepare Your Business for Litigation

As a leading business and civil litigation firm in Los Angeles, OakTree Law will help your small business prepare for a lawsuit. Many small business owners are unfamiliar with the process. Lawsuits are more common than you think. They may be filed by customers, employees, shareholders, vendors, partners, and others while your organization may find reason to open a dispute with an opposing party. When you are facing business litigation, here is a roadmap for being prepared so you can save money, time, and your reputation.

Step 1: Purchase Business Insurance

Being insured will help you prepare for a future lawsuit. You can start with a general liability insurance policy, although depending on your industry, there may be more specific types of coverage to consider. The policy should cover common types of disputes in your field. When a dispute arises, submit a claim as soon as possible; your insurance carrier can tell you if the coverage applies and may determine how legal representation will be carried out.

Step 2: Document Your Evidence

When facing business litigation, it’s essential to preserve as much documentation as possible to build your defense against the other party’s allegations. It also helps to be organized and develop a strategy. All information must be accurate. Never improvise or fabricate details; the court can impose severe penalties for fraudulent activity. Create a detailed written account of the event leading to the lawsuit. It should include statements from anyone involved, contracts, invoices, memoranda, letters, emails, and any other written materials.

Step 3:  Limit Communications with the Other Party

Once a lawsuit has been filed, communications between you and the defendant can be used against you. The opposing party may record verbal communication and present it in court. And, never apologize for the situation as your well-intentioned apology can serve as an admission of guilt. Also, legal disputes are often stressful; interactions with the other party can lead to using offensive or aggressive language, which can tarnish your image, especially in the eyes of a judge or jury.

*Never communicate with the other party unless your attorney approves of it.

Step 4: Continue Running Your Business

Every business needs to handle its challenges for it to survive. Your team must work together to maintain day-to-day operations, meet deadlines, and fulfil other obligations. Perseverance and integrity can even help limit liability in the long run. Some lawsuits can take years to resolve.

Step 5: Explore Alternatives to Litigation

A pre-trial settlement is often a quicker, less costly solution. There’s also less risk than going to court, where a judge’s or jury’s decision may not lead to a favorable outcome. Dispute resolution allows each party to agree on a solution that works for them, as well as focus on the financial aspects of the matter.

Step 6:Hire an Attorney

Find an attorney experienced in the type of dispute your company is facing. They can help you prepare for business litigation using their knowledge of such disputes and your industry. With legal counsel by your side, you’ll benefit from:

  • Help conducting a formal investigation into the claim.
  • A strategy that considers the cost of defense, monetary damages, and the odds of winning the suit.
  • Professional guidance as to whether a trial or settlement agreement would be more beneficial.

All communications with your attorney are protected under attorney-client privilege. Details you discuss in private cannot be used in court. But if a third-party has access to this communication, such as if an email is forwarded to another party, it’s no longer protected. If you and your attorney meet with a third party; the law doesn’t forbid them from using the information obtained during testimony.

Contact OakTree Law

Our legal team works with business owners across Los Angeles and Orange County in areas of business litigation, breach of contract, partnership and corporate disputes, intellectual property, wrongful termination, breach of fiduciary duty, misrepresentation/fraud, and more. We can recommend the right course of action for your case. In addition, we often recommend alternatives to litigation such as arbitration and mediation. Our mission is always to achieve the best possible outcome for our clients.

Request a free evaluation to get started or call 888-348-2609 today and speak with a representative.