Your business got sued…now what?

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You started your business to follow your passion; to create something; to make money. You have just been sued and it seems like all of that can be taken away from you in one fell swoop. It is important that you understand the process of litigation and conduct your actions in the most proactive way to protect your business. The following outlines the basic life of a lawsuit:

A lawsuit starts with the filing of a complaint. A complaint generally sets forth the parties to the lawsuit and the facts alleged. Upon the filing of a complaint, a summons is issued. When you get served (you are the “defendant” in the action), you will receive a copy of the complaint along with the summons.

Upon receipt of the summons and complaint you typically have twenty days to respond. Your response can be in the form of an “Answer” or a “Motion to Dismiss.”  An answer is basically a response that denies the allegations contained within the complaint.  A motion to dismiss should be filed in the limited circumstance where there are real issues concerning jurisdiction or if there is a legal (as opposed to factual) basis for having the Court end the litigation before it truly starts.

Assuming that an answer is filed, there are several procedural steps that must occur and then “Discovery” can start.  Generally, discovery is both the most time-consuming and expensive phase of a lawsuit.  Discovery can come in the form of written questions (called interrogatories); written requests for admissions; written requests for documents and depositions.  Depending on the type of lawsuit, discovery can take several months to conclude.

Once discovery is concluded, a trial will proceed. Trials are either “Bench Trials” – where a judge hears all of the evidence; or “Jury Trials” – where a jury will hear all of the evidence and ultimately make a decision based upon the evidence.

Once the trial has concluded, there can be an appeal (where the matter goes before either the Court of Appeals or the Supreme Court) or other post-trial proceedings.

The process can take years (average time for a trial to proceed in Clark County, Nevada is a little over three years after the complaint is filed). At any time during the lawsuit, the parties can negotiate a settlement.

As with all legal matters, remember that your lawyer works for you. Be sure to understand what your lawyer is doing and why she is doing it. Be sure that your lawyer explains to you the costs and benefits of each action she is recommending for you to take.

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