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Lawsuit filed against you

Immediate actions

Alert your lawyer

  • Let your lawyer know you’ve been sued.
  • FAX or PDF her a copy of whatever papers you’ve received.
  • Set up a time for an initial conference call with your appropriate decision-makers.

Litigation hold: Immediately stop even routine document destruction

In any litigation context, it’s crucial to initiate a “litigation hold” to prevent destruction of potentially-relevant documents. This especially includes stopping the deletion of emails and the overwriting of backup tapes. FAILURE TO DO SO CAN RESULT IN SEVERE PENALTIES.

A litigation hold should be put into place:

  • whenever you’ve been sued;
  • if there’s a reasonable likelihood that you are going to be sued (for example, if you’ve received a demand letter);
  • if you’re contemplating suing someone else.

For more information, see, e.g.:

Insurance: Notify all potentially-relevant carriers

  • Review all policies that might provide any kind of coverage (read: money) —even “expired” policies might have some residual coverage.
  • Notify all applicable insurance carriers — most policies give the insurer some “flexibility” in paying if not timely notified.
  • In communicating with insurance carriers, be careful not to waive any applicable attorney-client privilege or attorney work-product immunity. It’s often best to have your lawyer closely involved in such communications.

In some circumstances, your lawyer might want to consult an insurance-law specialist.

Near-term follow-up actions

Check deadlines for the initial response

If your lawyer doesn’t soon tell you, then ask about the following:

  • The deadline for filing your initial response in court, and whether it will be desirable to seek an extension;
  • Any special filing requirements that might apply: for example, obtaining sworn statements to accompany the filing.
  • When your lawyer will have a first draft of a response for you to review.

Work with your lawyer to figure out what “the story” is

As soon as practicable, your lawyer should be interviewing witnesses and reviewing key documents to get a handle on what “the story” is, so that your assertions in the case can be consistent — opposing counsel are quick to pounce when a party to a lawsuit changes its story.

Be careful about playing detective yourself

Check with your lawyer before interviewing witnesses or reviewing others’ documents yourself — doing so conceivably could screw up the attorney-client privilege or attorney work-product immunity. This is especially true if you might be a witness yourself: you could be forced to produce and answer questions about documents you reviewed in preparation for your testimony.

Advance preparation

Document organization

One of the best things you can do to be ready for a lawsuit — even if nothing is on the horizon — is to organize your documents so that they’ll be easy to produce.

(Organizing your documents is good idea for another reason: In a financing, IPO, or M&A transaction, the party with the money is almost certainly going to want to review your documents; having them more or less organized in advance can speed things up, which is almost always a Very Good Thing.)

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