Being served with a lawsuit starts the clock, and what your business does next can affect the entire case. Receiving a summons and complaint can disrupt any business. The papers may arrive at the office, be delivered to a registered agent, or reach an owner or executive with little warning. The allegations may be surprising, exaggerated, or completely inconsistent with the business’s understanding of what occurred.
But the first few days after a business learns that it has been sued are important. A deadline to respond may exist, documents and communications may need to be preserved, insurance coverage may need to be investigated, and decisions about how to respond to the lawsuit may need to be made quickly. Before deciding whether the plaintiff is right or wrong, the business should understand what happened and begin protecting its position.
Service of the Lawsuit Starts the Litigation Process
A summons and complaint generally begin a civil lawsuit. The complaint identifies the plaintiff’s claims and the factual allegations supporting them. The summons notifies the defendant that they have been sued and must respond. How and when the opposing party served the papers can matter. Different methods of service may trigger different response deadlines, and questions sometimes arise about whether service was properly completed. A business should therefore preserve the papers exactly as they were received and determine who received them, when they were received, and how they were delivered.
The business should not assume questionable service means it can simply ignore the lawsuit. Even when there may be a legitimate objection to service, the issue generally must be addressed through the litigation process.
The Business Should Identify the Deadline to Respond Immediately
One of the first questions after receiving a summons and complaint should be: When is our response due? The answer can depend on the court, the method of service, the type of lawsuit, and other procedural considerations. Missing the applicable deadline can expose the business to a potential default.
That is why the summons and complaint should be sent to litigation counsel promptly rather than sitting on someone’s desk while the business conducts its own investigation. Counsel can determine the applicable deadline, evaluate whether service raises issues, and identify what must happen before the response is due.
The Complaint Should Be Reviewed as a Litigation Document
Business owners understandably tend to read a complaint by focusing on allegations they believe are inaccurate. But you should also evaluate a complaint strategically. Counsel will typically examine what claims have actually been asserted, what the plaintiff must prove, what damages or other relief the plaintiff is seeking, whether the allegations adequately support the asserted claims, and what defenses may be available. The business may also need to consider its own potential claims against the plaintiff.
That review helps determine the appropriate response. Depending on the circumstances, the business may answer the complaint, assert affirmative defenses and counterclaims, challenge some or all of the claims through a motion, or pursue another procedural strategy.
Your Business Should Preserve Relevant Evidence
Once litigation begins, or is reasonably anticipated, the business should take steps to preserve potentially relevant evidence. That may include contracts, amendments, emails, text messages, invoices, accounting records, internal communications, photographs, project files, electronic records, and other materials relating to the dispute. Relevant information may exist on company systems as well as employees’ phones, laptops, messaging platforms, or other devices.
You may also need to suspend normal document-deletion practices for potentially relevant information. Waiting until discovery begins to think about preservation can create unnecessary problems if important evidence has already been deleted, overwritten, or lost. At this stage, the goal is not simply to collect documents that help the business. Evidence that may be unfavorable should also be preserved. Litigation counsel needs the complete factual record to evaluate the case accurately and prepare an effective strategy.
Your Business Should Investigate Insurance Coverage Promptly
Depending on the nature of the claims, the business may have insurance that provides defense coverage, indemnification, or both. Relevant policies could include commercial general liability, directors and officers coverage, employment practices coverage, errors and omissions coverage, cyber coverage, or another form of business insurance.
Policies often include notice requirements, so the business should not wait months into litigation to determine whether coverage exists. Review the complaint and applicable insurance policies promptly, and provide appropriate notice where warranted. Whether an insurer ultimately covers the claim is a separate question. The immediate objective is to avoid unnecessarily jeopardizing potential coverage through delay.
Internal Communications About the Lawsuit Require Care
Once a lawsuit arrives, owners and employees may immediately begin emailing or messaging each other about what happened. Those communications can eventually become relevant to the litigation. Businesses should therefore be thoughtful about internal discussions concerning the dispute. Employees should not speculate about responsibility, alter documents, attempt to coordinate stories, or send emotional messages about the plaintiff or the lawsuit.
At the same time, the business should identify the people who actually know what happened. Those individuals may possess important documents, communications, or firsthand knowledge that counsel will need when investigating the allegations.
Retaining Litigation Counsel Early Can Preserve Options
A business does not need to have its entire defense figured out on the day it receives a complaint. It does, however, need to begin making informed decisions. Early involvement of litigation counsel can help the business identify deadlines, evaluate service, preserve evidence, investigate insurance coverage, assess the allegations, identify potential defenses and counterclaims, and determine the appropriate initial response.
That early assessment may also reveal opportunities that are less obvious from reading the complaint alone. The plaintiff may have vulnerabilities in its claims. The business may possess significant counterclaims. Contractual limitations on damages, arbitration provisions, forum-selection clauses, indemnification rights, or other provisions may materially affect the dispute.
The First Response Can Shape the Litigation
Being served with a summons and complaint does not mean the plaintiff has proven anything. A complaint presents the allegations against the business, and the defendant will have an opportunity to challenge them and present its own position.
What matters initially is responding deliberately, not reactively. Identifying the deadline, preserving evidence, reviewing potential insurance coverage, understanding the claims, and developing a response strategy can put the business in a much stronger position as the litigation moves forward.
Alisme Law represents businesses, owners, shareholders, and executives in commercial litigation throughout New York. When a business has been served with a lawsuit, we help evaluate the claims, identify potential defenses and counterclaims, and develop a strategy for responding to the litigation.
Contact us to schedule a confidential case evaluation at 917-540-8432.
This article is for informational purposes only and does not constitute legal advice.