“A Client Threatened to Sue Me. What Should I Do?”

As a business owner, there are few things that are worse than getting sued by a client. From expensive legal fees to a tarnished reputation, there are many reasons why you want to avoid getting sued at all costs. That’s why it’s important to act fast if a client has threatened you with a lawsuit and to take the threat seriously, even if you don’t think their claims are worthwhile. Regardless of the reason why you were threatened, there are some basic steps you can take to deal with the situation. Let’s discuss.

1.   Evaluate the threat.

The first thing to remember is that most threats don’t actually lead to lawsuits. And, if you’ve set up your business properly, you do have insurance that can help cover you if a lawsuit does materialize. That said, the most important step you can take upon receiving a threat is to evaluate its merit closely and carefully. The legitimacy of some claims will be more obvious than others, and you can rely on your business judgment and experience to help you assess both the accusation and the person who is making it.

2.   Gather information.

In order to evaluate a threat properly, you need to gather any and all relevant information related to your client’s claims. At a minimum, you should collect a summary of their complaint and any information they are using to support their assertions. Making sure to document your interactions with the client at every stage is also very important. By keeping a record of everything that has transpired, you avoid the risk of any “he-said, she-said” issues down the road.

3.   Settle legitimate claims.

If you find that the claim is legitimate, or even just has enough substance to bring you legal fees and bad publicity, it might be in your best interest to settle quickly and quietly. One of the best parts about settling claims is that your discussions and decisions remain confidential, and you can control how the case is handled from start to finish. The settlement process is typically much faster and cheaper than going to court, so even if you aren’t thrilled at the prospect of working with your accuser, sometimes it’s the best decision for your business in the long run.

4.   Speak with a qualified business law attorney.

If you are unsure about the legal merits of a client’s allegations or if you’ve received a legitimate threat, then it’s essential to speak with an experienced business law attorney right away. Your attorney can help assess the situation and provide expert counsel and guidance as you navigate the delicate settlement process or fight to protect yourself and your business in court. Additionally, a business lawyer can help you avoid more close calls in future by educating you on the law and the steps you can take to safeguard your organization.

At Integrated General Counsel, we understand that getting threatened is stressful, and it can cloud your judgment more easily than you might realize. If a client has threatened you with a lawsuit, and you’re worried about what that might mean for your business, please don’t hesitate to contact us today!

Share this on...Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Email this to someone

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.