While most business owners employ a variety of professionals to keep themselves out of court, there are times in which nothing can be done to avoid it. Whether your company ends up in the midst of a lawsuit, is charged with violation of industry regulations or even if your company is acting as plaintiff, going to court is stressful. Before your company is asked to plead its case, there are things you, as a business owner, can do to prepare. Marty L. Oblasser of Corthell and King, P.C. shares advice on how your business can prepare for its day in court.
(Photo courtesy of Marty Oblasser)
Find out if you can represent your business
According to Oblasser, the first thing a business owner should do is ensure that they are the appropriate person to represent the business. “If a business owner is planning on representing the company in court, it is important to know whether or not the business owner is allowed to do so. Not only can this requirement vary from state to state, but it may also vary between the judicial systems in a single state. Therefore, the business owner’s first course of action is to determine who is allowed to represent the company before the court.” Bearing in mind the preparation time, Oblasser advises interviewing attorneys once it is determined that you can appear in court on behalf of your company.
Check your records
After you’ve hired your attorney, it is necessary to review all company records, especially those that are pertinent to the case. Oblasser states, “The business owner needs to preserve the business’ documents. Destroying or discarding company documents during a lawsuit could lead to further liability.” Careful record-keeping could help your case. Oblasser advises, “Once a business is sued, the business owner’s saving grace may be the formalities it kept for the years prior to the lawsuit being filed. Specifically, proper entity selection for the business will help insulate the business owner from personal liability. Accordingly, the company should keep meeting minutes, resolutions of decisions made and ensure business assets are not co-mingled with personal assets.” She also recommends checking through your company’s insurance policy, as many policies cover costs associated with a lawsuit.
While it can be tempting to vent to anyone and everyone about your case, doing so could actually cause problems later on, and it can end up diluting your brand. Oblasser states, “The way you protect the brand and mitigate damage will differ with each action and the claims alleged. Nevertheless, in any situation it is important that the business owners and the employees are careful not to make statements about the lawsuit. Not only will this help protect the brand, but it will also help mitigate further liability issues.”
Taking precautions can keep your business from ending up in the midst of a law suit, but keeping detailed records and being prepared will help you in the event that it happens.
Alaina Brandenburger is a freelance writer living in Denver. Her work can be found at Examiner.com.