7 Things You Can Do Right Now to Protect Your Business from Frivolous Lawsuits

When running a business, getting sued is not something you can always avoid. Unfortunately, some people see businesses as targets for lawsuits because they hope that the business will either settle out of court, or that they will get a judge to rule in their favor. Even when someone files a frivolous lawsuit, it can be quite costly. Having to go through the process of having an attorney go to the judge to explain why the lawsuit is frivolous takes quite a bit of time and money. The following six things are simple ways a business can reduce the risk of being targeted by a frivolous lawsuit.

Use Warnings Liberally

Warning signs and labels can help ensure customers and others in the area are aware of any potential risks that are present. Taking the time to issue warnings, even when a risk seems obvious, can help minimize the risk of being sued by someone who may be intentionally getting hurt just so they can sue.

Utilize Contracts and Prevailing Party Clauses

Utilize contracts as often as possible which clearly define your relationships with employees, customers, clients, vendors, partners, contractors, and anyone else your company comes in contact with. By clearly defining the terms of these relationships, you will minimize the chances that the opposing party will try to make a quick buck by means of litigation. Additionally, including a prevailing party clause in your contract serves as a major line of defense. This type of clause states that, should the other party ever pursue litigation against your company, the party that loses the cases will be required to pay the legal fees of the prevailing party. This can serve as a major deterrent to frivolous lawsuits, since only someone who is confident they could win a lawsuit and avoid paying those legal fees would ever risk bringing a case against you.

Post Store Policies Publicly

Make sure you have a comprehensive store policy, and have it publicly posted for everyone to read. This policy can cover things like how people must behave in the store, how they should report problems, and much more. A properly written store policy can provide a lot of legal protections, and those who try to make money filing lawsuits are aware of this.

Provide Exceptional Training to Your Staff

One of the biggest risks for a business is that an employee will do or say something that they shouldn’t, leaving the business exposed to legal risks. Taking the time to ensure your employees know how to handle any situation that may occur, and what they should do if something unexpected happens, can thwart the plans of someone who wants to sue your business.

Have Proper Insurance

Having the right types and amounts of insurance is a great layer of protection. Insurance companies can provide certain protections against frivolous lawsuits, and cover the costs should they occur, at least in many circumstances.

Keep Facility Clean and in Good Working Order

Keeping your business clean and in good working order is absolutely essential. If someone who is looking to sue sees a broken floorboard, for example, they can easily (intentionally) trip over it and file a lawsuit. Walk through your entire business regularly to identify potential hazards, and have them fixed or removed.

Record Phone Conversations

Having all of your phone conversations recorded is another great way to protect your business from frivolous lawsuits. However, in California you may not record a phone conversation without the other person’s consent. Without a recording of a phone call, it becomes a matter of ‘he said, she said’ in the courtroom. With modern technology, recording calls is very simple and affordable.

Contact Us

If your business is being sued, or you are interested in taking action to minimize your risk of getting caught up in frivolous lawsuits, please don’t hesitate to contact Integrated General Counsel. [Link to CONTACT US page] We can look at the situation you’re facing, provide advice and insights, and if needed, provide aggressive representation throughout your case.

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Written by Integrated General Counsel

Our focus includes handling a variety of corporate matters and also includes litigation in state and federal courts. Our current practice includes providing transactional services and representing a variety of small and medium-sized companies as their outsourced general counsel.