You are a hardworking, law abiding person. You drive the speed limit (most of the time). You have life insurance and a will, or at least have given them some serious thought. When you hire someone to perform work on your home or business you take time to read the contract before your sign it. Before you go into business with anyone you set forth all of the critical terms in an agreement. You treat your employees and colleagues respectfully and try to do things the “right” way.
Unfortunately, despite all of your hard work and best intentions, you are not immune from the nausea that can accompany the receipt of a summons and complaint. Instantly, the world starts spinning faster and your heart begins to pound so hard it seems to be bursting from your chest. Immediately visions of financial devastation play in your mind like a bad movie. As fear turns to anger and back again it may be difficult to remain composed and almost instinctively you may feel tempted to react. Knowing what to do … and perhaps more importantly … what not to do … from the moment you are served is critical to achieving a successful outcome and maintaining your sanity.
The Do’s and Don’ts –
Rule 1 – Do take a deep breath and remain calm. As foreign as it may seem to you, lawsuits are filed every day, so you are far from alone in finding yourself an unwilling participant in litigation. Don’t take any drastic action. Don’t call the plaintiff or the plaintiff’s attorney and discuss your position or ask them to dismiss the case. Much like the police officer always says in those bad TV shows, anything you say, can and will be used against you in a court of law. Keep in mind you can easily make matters worse if you take any steps before you get proper advice and an analysis of the situation. As a general rule, the service of a summons and complaint triggers the start of a marathon not a sprint.
Rule 2 – Don’t delete, erase, shred or alter anything that relates to the claim. At this point the facts are the facts. You cannot change the facts, and any sense that you are better off if you “change” things is incorrect. Destroying or altering evidence will only hurt your case and may constitute a crime. Moreover, in this electronic age, “erasing” anything is virtually impossible. In fact, you should be taking immediate steps to preserve any information relating to your case in whatever format it may be. With respect to electronic information such as emails and computer files you should take active measures to prevent any inadvertent or automatic deletion by anyone. If information is lost or destroyed a judge or jury may be entitled to assume that the information was harmful to your position.
Rule 3 – Do act quickly to determine any applicable deadlines. Once you have been served there is a specific deadline for you to file a response to the Complaint. Failure to respond in a timely fashion can be fatal. Confirm the applicable deadlines and contact counsel.
Rule 4 – Don’t discuss the case with anyone until after you have spoken to your attorney. See Rule 1 above. You may feel strongly that you can explain your position and justice will prevail. I say it again – See Rule 1 above. Anything, no matter how well-meaning or true, could come back to haunt you. Don’t take to social media to comment about the case, the plaintiff, the plaintiff’s attorney, the legal system, or anyone involved in the case. Don’t talk to the media. If you are contacted about the case, politely decline to discuss active litigation matters and refer the person to your attorney.
Rule 5 – Do consult with an attorney. I know – you are already envisioning a bill. Stop. Attorneys are like every other professional service provider in that they charge for their time. That is how they pay their bills. More importantly, they have been professionally trained and have practical experience so they can offer an unbiased assessment of your situation and come up with a plan of action. Your communication with an attorney is also privileged. Thus, you can candidly talk to your attorney without concern that the communication will be revealed. You should also feel free to consult with a number of attorneys before selecting one who will handle your matter. You and your attorney will be going to battle together so it is important that the personality fit is a good one.
Rule 6 – Do contact your insurance agent. You bought insurance for a reason. Use it. Ask your insurance representative whether any of your insurance policies may afford coverage or a defense. Even if you don’t believe you have coverage, don’t wait to inquire. A mistaken belief that you don’t have coverage could adversely impact any actual coverage or defense obligation. Remember, an insurer’s duty to defend can be broader than its duty to indemnify so you may be entitled to defense costs even if liability may not be covered. If your insurance company declines to help, consult with your attorney to determine if you have any recourse.
Rule 7 – Don’t wait to start your homework. The passage of time does not make things any clearer and documents tend to get lost. Immediately identify the relevant documents and the people with any knowledge about the claims. Prepare a detailed outline of the critical facts, documents and contact information about all the witnesses for your attorney. Your lawyer will be better prepared and you can significantly reduce your own legal costs by being a productive member of the team. Also, remember Rule 2 above. Preserve all relevant information in whatever format it is.
Rule 8 – Don’t put your head in the sand and hope that the case goes away. Talk to your lawyer about the strengths, weaknesses and costs that you are confronting. Consider whether you have any claims against the opposing party. In every adversarial matter leverage is critical. Consider whether involving a neutral mediator at an early stage may be beneficial. Once an attorney is involved, it may be worthwhile to explore the merits of the claim through the use of a neutral mediator. You will be forced to participate in settlement efforts anyway, so be open to exploring the potential for an amicable resolution with the assistance of your attorney before you begin incurring significant costs.
Rule 9 – Don’t transfer assets. Any transfer of assets outside of the normal course of business after you have been sued can be problematic and expose you to claims of improper transfers and potentially punitive damages.
Rule 10 – Do prepare a budget and be prepared for business interruption. In almost every instance, whether you have insurance that will respond to the particular claim or not, you will incur out of pocket expenses. For proper planning you should have an understanding of the costs that are on the horizon. Litigation budgets are a good tool, but an initial budget projection is not a substitute for candid and frequent communication. Also, you have a life to lead and a business to run. Be realistic about what you can afford and discuss alternate fee arrangements or other options that may be available. Good attorneys want a mutually beneficial relationship with their clients. Also, prepare from the outset for personal and business disruption. Courts set their own schedules. Fact investigation and the discovery process will require significant time and effort.
Rule 11 – Do prepare for trial. While the vast majority of cases are resolved before trial, it is a fatal mistake to approach the process with anything other than full commitment. You should be prepared to free your calendar in the months ahead so you are free to assist your attorney and participate fully in the preparation of your case.
About the Author
Jim Timmerman is a founding partner of Timmerman, Beaulieu, Hinkle & Esworthy, LLC. Jim’s practice focuses on complex business and insurance litigation in Maryland’s federal and state courts. He also advises individuals and businesses of all sizes on general business and risk management issues. He can be contacted by phone at (410) 649-4440 or by email at firstname.lastname@example.org.