Ohio business lawyers provide advice to companies on the lawsuit risks that they face. Companies can be sued by individuals, such as disgruntled employees who believe they were wrongfully terminated or who believe they were discriminated against. It is also possible for class-action lawsuits to be filed against companies.
What is a Class Action?
A class-action lawsuit arises when multiple people allege they have all been harmed by the same wrong. Individuals who were affected by the company's conduct gathered together to file a lawsuit against it. A class action can be filed by several plaintiffs who believe they were all harmed by a product that failed to live up to its promises, or by the same discriminatory employer. They can also join together if they have all been injured by a company's negligence.
Your business is being sued. Now what?
Step 1: Review the Case With an Attorney
You should consult with an experienced business lawyer as soon as you receive the lawsuit papers. To ensure that the lawsuit lists the proper entity or person associated with the issue, review its caption and service information.
Any error in this information can be used to dismiss the entire action. If it is correct, you should proceed with reviewing the allegations and put a litigation hold, or preservation order, in place. In such circumstances, the company is required to maintain all documents that may be relevant to the legal action.
Once a lawsuit has been filed, do not communicate with the plaintiff. All communications should be through your company’s attorney.
Step 2: Inform your Insurance Provider of the Complaint
There are several types of business insurance policies that cover companies in the event of a lawsuit. It's common for your benefits to pay for attorney's fees, court costs, and any settlement or judgment you're found responsible for paying if the suit falls under what your policy covers.
A general liability policy may indeed cover certain types of lawsuits, but do not automatically assume this is the case. You should check with your insurance provider about whether the lawsuit is covered, as the specific circumstances of the suit may disqualify it.
Step 3: Decide How to Proceed and Respond to the Complaint
When you receive a lawsuit, you are issued a deadline to submit a written response to it within 28 days, or 60 days if the defendant is outside the United States. Your answer should include:
- Admittance or denial of each of the plaintiff's allegations
- Your defenses and counter/cross claims against the plaintiff or other defendants
- Whether you want a jury trial or an alternative resolution (e.g., an out-of-court settlement)
Do Not Ignore the Suit
If a defendant fails to respond to a lawsuit within the allotted time, the plaintiff has the right to file a Request for Default after another 30 days. As a result, the plaintiff will win, and any judgment against you will be enforced.
Step 4: Find a Defense Attorney
Faruki LLP can assist businesses in understanding how class actions work, why class action litigation arises, and what steps companies can, and should, take to reduce the chances of being named as a defendant in a class action. To find out more, contact us today to talk with our expert business lawyers who can help your business to reduce the chances of a costly lawsuit.
