I have been sued, what do I do now?
I have been sued, what do I do now?
Firstly - don’t get sued to start with. Before the Court Proceeding arrived, you would have received a letter of demand of some variety outlining the dispute, why the other side felt aggrieved and what they wanted. OK you probably didn’t agree with their version of events or their demand, but that doesn’t mean you stick your head in the sand and ignore them. Get on the front foot, get legal advice on your position and reply to the demand.
Your reply may take the wind out of their sails, or you may be able to negotiate a quick settlement.
Secondly – if you have been sued, don’t ignore it. You only have 28 days to file your defence or try to negotiate an out-of-court settlement. If you don’t, the other side can apply for default judgment. This is a decision where they win the amount they sued for, but also extra money for interest and their legal fees incurred. Once a judgement/order has been entered against you, that can be used to wind up your company, or bankrupt you personally, or haul you into court along with your financial documents to extract the money you owe. None of which is pleasant.
Thirdly - Remember once sued, it may be too late to try and go back and re-open an old offer to settle. The other side will have incurred and be entitled to interest on the debt (approx. 7% at present), court filing fees, and the fees they have paid their lawyer for advice and drafting the court documents.
Fourthly – get a lawyer, a good one. Not all lawyers are the same. Some specialise in wills, or tax, or property. Many dabble in disputes, some do it full time. Make sure you get the right one (a full-time disputes lawyer). And not one that wants to just have the court fight, but one that will try and negotiate a settlement and get you back to what you do best – your business – as quickly and cheaply as possible.
Business take-away: If you receive a letter of demand don’t waste time. Get legal advice about your position and your rights quickly, you may be able to settle the dispute. If you get sued, see a good disputes lawyer as you only have a short time to prepare a defence or try to negotiate a deal.
The content in this article should be regarded as general advice only and is not intended as specific legal advice for individual cases.