Receiving a lawsuit is a daunting and often overwhelming experience for any business. Whether you are accused of breach of contract, negligence, or defamation, how you respond to the lawsuit will significantly impact the outcome of the case. In commercial litigation, early and thoughtful action is crucial to protect your business and minimise the financial and reputational damage. Below, we outline the steps you should take if you find yourself facing a lawsuit.
- Stay Calm and Review the Lawsuit
The first thing to do when you receive a lawsuit is to stay calm. While it is natural to feel overwhelmed, acting impulsively can harm your case. Take the time to carefully read the complaint, and understand the specific claims being made against your business.
You should also verify the facts of the case and identify any discrepancies or inaccuracies. If any of the claims are based on false or wrong information, it could serve as the basis for a strong defence. There is usually a deadline for your to respond to the complaint, failing which you are deemed to have admitted the claim. This is why it is essential to consult with an experienced commercial litigation lawyer immediately in order to protect your interest and to put in a good defence. Alternatively, depending on the facts, an experienced lawyer can also contact the lawyer on the other side to start negotiations for a settlement. The earlier the settlement (if appropriate), the lesser the legal fees incurred for both sides.
- Notify Your Insurance Provider
Many businesses have insurance policies that cover legal expenses related to lawsuits. Contact your insurance provider as soon as you receive a lawsuit to find out whether your policy covers the legal costs associated with the commercial litigation.
Insurance policies may cover various types of legal claims, including negligence or defamation. It is essential to understand your policy’s terms to see if your insurance policy covers the situation and thus, the legal fees to be incurred and the damages which you may have to pay if you lose. Sometimes, for example in cases involving motor negligence cases, the insurance company may appoint its own lawyers to handle the case for you.
- Consult a Commercial Litigation Lawyer
When you are facing a lawsuit, seeking the counsel of an experienced commercial litigation lawyer is critical. A lawyer with expertise in handling commercial disputes can provide valuable insights into the strengths and weaknesses of your case, allowing you to make commercial decisions in respect of the case early. They can also help you develop a strategy for responding to the lawsuit and protecting your business.
Your lawyer will help you determine whether there are legal grounds to challenge the lawsuit, negotiate a settlement, or go to trial. In some cases, they may recommend alternative dispute resolution (ADR) methods such as mediation or arbitration.
- Consider Defamation Claims and Online Reputation Management
In today’s digital world, defamation can be a significant concern for businesses. If the lawsuit involves claims of defamation—whether in traditional media or online—you may need the services of an online defamation lawyer. These professionals can help protect your reputation and assist in mitigating the damage caused by defamatory statements about your business.
Defamation lawsuits can be particularly challenging because they often involve subjective opinions and statements made on social media or websites. With the help of legal experts, you can take steps to remove or address defamatory content quickly to minimise harm to your business.
- File a Response Within the Deadline
Once you have reviewed the lawsuit and consulted your lawyer, the next step is to file a response. Failing to file an appropriate response within the prescribed deadline could result in a default judgment being entered against your business.
Your lawyer will assist in drafting a formal response to the lawsuit, which may include a defence and/or counterclaims. In some types of cases, there are court procedures or “protocols” which must be adhered to, which a lawyer who is experienced in the particular area will know.
- Explore Settlement or Alternative Dispute Resolution (ADR)
While it is important to prepare for litigation, not all lawsuits need to go to court. If the lawsuit is based on a dispute that could be resolved amicably, your lawyer may recommend settlement negotiations or alternative dispute resolution (ADR) methods like mediation or arbitration.
Settling the lawsuit outside of court can save your business time and money while avoiding the reputational damage that often comes with lengthy trials or publicity. Mediation and arbitration are also less formal than traditional litigation and can be more flexible in terms of resolving the dispute.
- Prepare for Trial if Necessary
If settlement or ADR is not possible, the next step is to proceed with the case and prepare for trial. Your lawyer will help you gather evidence, build your defence, and formulate legal arguments that support your case. This process may include interviewing witnesses and collecting documentation that strengthens your position.
While some commercial litigation cases are settled before reaching the courtroom, it’s important to be ready for trial if necessary. A well-prepared defence can significantly increase your chances of a favourable outcome for settlement talks or for trial.
- Understand the Risks and Costs
Commercial litigation can be expensive and time-consuming. Even if you are confident that you have a strong defence, there is no guarantee of winning. Therefore, it is crucial to weigh the potential risks and costs associated with the lawsuit. In some cases, the benefits of settling may outweigh the risks and costs of going to trial.
Discuss with your lawyer the possible outcomes of the case and whether a settlement or judgment is more favourable for your business in the long run.
Conclusion
Facing a lawsuit in commercial litigation is a challenging and complex process, but with the right legal guidance, you can navigate it successfully. From staying calm and reviewing the lawsuit to considering settlement options, each step is vital to protecting your business and minimising the impact of the legal dispute.
If your business is involved in a lawsuit, Doris Chia provides expert commercial litigation services in Singapore. Get in touch today to learn more about how Doris can help you manage legal disputes, defend your business, and resolve conflicts efficiently.
