What To Do When You’ve Been Sued

You’re watching the game, eating that seven layer dip your wife makes, enjoying an adult beverage or two. The doorbell rings and somebody you don’t know hands you a bunch of documents and tells you you’ve been served. It takes you a minute to figure out what’s going on but eventually it sinks in—you’ve been sued. You promptly panic, envision losing your house, and using your children’s college fund to pay a bunch of lawyers who won’t return your phone calls. I’m not going to lie to you. Being a defendant in a lawsuit is worse than getting a root canal or watching the out-takes to American Idol–it’s really bad. There really is very little upside and the downside is considerable. However, as in all things, keeping your wits about you will serve you well. Here’s what you do:

1. Jump on this immediately. Do not pretend like it is not happening and that it will go away. This is one of those problems that if ignored, will get bigger and more disastrous.

2. Do not destroy any documents or computer files related to the facts or issues in the lawsuit. Doing so can come back to bite you and you will undoubtedly regret it.

3. Use your contacts to find a good lawyer that specializes in the area of law in which you’ve been sued. Don’t just assume because you’ve seen an ad for this person during Judge Judy that he or she is a good lawyer. I can assure you, there is a very wide range of competency among lawyers and you want someone at the top of the range. If you know a lawyer personally, that is the best place to start. Ask him or her for suggestions. Ask it this way: “If you were the one being sued, who would you use?” Ask your contact for referrals inside and outside his or her own law firm. Call those folks and ask the same question. After a few calls, you will notice that you are hearing the same two or three names over and over again. Set up a meeting with each of those two or three and quiz them carefully about how they would approach the case, what they know about the judge, and the reputation and competency of the opposing lawyer. Hire the one who seems the most enthusiastic about your case and that you have the best feeling about.

4. Understand that if this person is any good, you will have to pay them, probably by the hour. Generally, unless you have some sort of fabulous counterclaim to make against the party suing you that would entitle you to a big payout, a decent lawyer will not defend you for a contingency fee. Even a terrible lawyer won’t defend you for a contingency fee if you don’t stand a chance of winning a big settlement, which is almost always the case when you’re a defendant. Fees can vary wildly, depending upon the area of law you are dealing with, the complexity of the case, the seniority and reputation of the lawyer, and the area of the country in which you live. I can tell you this: it won’t be cheap.

5. In that bunch of papers that the process server handed you was a complaint. You will have to file an answer to that complaint, paragraph by paragraph, usually within 20 to 30 days of the date you were served. Your lawyer, if you have one, will do this for you but you should carefully review everything to make sure it is correct and complete. If you don’t file your answer on time, the court could enter a default judgment against you, which is a very bad thing. Don’t let that happen. If you have not yet found a lawyer before your answer is due, at the very least, write a letter to the court telling it that you are diligently working on finding counsel and request an additional 30 days to answer. While I can’t promise you that this will work, a court isn’t likely to enter a default judgement when there has been some sort of effort on the part of the defendant to keep it informed and to find counsel.

6. Once you select a lawyer, ask him to figure out immediately what your exposure is. You cannot make a rational informed decision about how to approach the case unless you know what your worst case scenario is. Insist that this analysis be a high priority on the front end.

7. Do not get your back up. You will undoubtedly be furious that you have been sued and will, even if you are a very nice person, find yourself hating the plaintiff with a passion. Don’t let this cloud your judgment. Staying in a lawsuit (as opposed to seeking a quick and fair settlement) for the principle of the thing is usually a stupid move. Keep your wits about you and think like a business person, not like a Hatfield or McCoy.

8. That being said, there are times when you simply can’t compromise. Maybe it’s a bet the company-type issue and you have no choice but to go the distance and fight as hard as you can. If this is the case, by all means strap on your armor and go to war. However, most cases have room on the front end for a reasonable and fair resolution. If this is possible in your matter, insist that this approach be explored, sooner rather than later.

9. Once you’ve found a good lawyer, trust him or her. Listen to their advice and take it unless it sounds patently ridiculous or self-interested. Remember to keep asking your lawyer the question: “What would you do if it were you facing this lawsuit (or facing this particular decision in the lawsuit).”

10. If you simply cannot afford a good lawyer, try your community’s legal aid organization. Your local bar association should be able to tell you where to call. If you don’t qualify for or can’t obtain pro bono (free or cheap) assistance, consider paying for two or three hours of a good lawyer’s time to tell you what your best defenses are and how you need to develop and plead them. (If you were paying close attention in your interviews with your prospective lawyers (see above) you should have learned a lot about what your possible defenses are already.) Then, familiarize yourself with the rules of the court in which you’ve been sued and follow them carefully. Contact the lawyer on the other side and tell him or her that you would like to explore a quick and fair settlement. Be extremely professional and respectful. You do not want to come across like an unreasonable crackpot or an impossible jerk. Emphasize that you don’t not have any money and, unless they take what you have to offer on the claim, you would have no choice but to explore bankruptcy. If the other lawyer is satisfied that you are not a deep pocket, you may be able to work something out fairly cheaply. If you are able to settle it yourself, insist on a full release of all claims that the plaintiff had or may have had against you. Insist on a provision that the lawsuit is dismissed with prejudice. Don’t pay unless you have a promise of at least these two things in writing. I would also strongly recommend your paying a lawyer to look over the settlement agreement to make sure that you don’t get taken for a ride.

Remember: this too shall pass. Figure out what you can learn from this experience and apply it. And don’t answer the door to someone you don’t know during a ball game.

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