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What To Do When Your Business Is In Legal Trouble

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when your business is in legal trouble

Trouble in business paradise? We have an excellent contributed article today about what to do when your business is in legal trouble. Let us know your thoughts in the comments.


Hopefully, you’re running your business responsibly and not doing anything you shouldn’t be. But even if you think that everything is above board, that doesn’t mean you won’t end up in legal trouble.

There are countless reasons that you might find yourself on the wrong side of the law; maybe you’ll end up making mistakes on your taxes that get out of control or maybe a customer thinks that you have wronged them in some way. Most businesses find themselves in some kind of legal trouble at some point and it can be a risky situation.

If you don’t handle things properly, you might end up paying out a huge settlement or even worse, going to jail. But if you’re sure that you haven’t done anything illegal, you can fight it in court and come out the other side in a good situation. These are the steps you need to take if your business ends up in legal trouble.

Cut Off Contact

If a lawsuit is brought against you by a customer or another company, you might be tempted to try to handle it yourself and settle things without bringing lawyers in but that isn’t always the right thing to do. Emotions can get in the way and you might end up saying the wrong thing. Anything that is said off the record without lawyers present won’t be useful in court either.

To avoid making the situation worse, you should stop contact immediately and only speak with them in the presence of lawyers. Get in touch with legal professionals and explain the situation to them. They’ll then tell you how to move forward and avoid making the situation worse.

Make Bail

If you are accused of a particularly serious crime, you might find yourself in jail. If that happens, you need to make bail as soon as possible because you aren’t going to be able to deal with the problem as effectively if you’re locked up.

If you don’t have the money to get out right away, you should contact companies like Charlotte Bail Bonds, LLC. They’ll be able to put the money up for you and get you out right away, then you can pay the money back at a later date. This is vital because you still need to keep the company going and reassure all of your employees that you’re going to deal with it and that their jobs are safe.

Review The Case With Lawyers

Now that you’re in a position to start looking over the case, meet with your lawyers and give them the full picture. It’s important that you’re completely honest here. They’ll only be able to help you effectively if they have all the facts so hiding things is only going to hurt you. It’s also important that you gather as much paperwork relating to the case as possible.

You need the evidence to fight the case in court and the more that you have, the better chance you’ve got of winning. That includes all of the official documentation but also any emails etc. that are related to the case.

Speak To Your Insurance Provider

Often, your insurance policy will give you some cover in the event of a lawsuit. This can be a huge help in paying for the legal fees but also in covering the settlement if you do end up losing. You should be going in with a positive attitude but you also have to be realistic about the fact that you might not win and start preparing for that eventuality.

Things like injury claims are usually covered by insurance and if a customer claims that your actions caused them to lose money, you should be covered for that as well. The process can be fairly lengthy and you’ll have to cover legal fees until you’ve dealt with the insurance so you should get started straight away.

It’s worth remembering that all insurance policies are different and some won’t cover you in this situation. If you put all of your eggs in one basket and count on the insurance company covering the legal fees and the cost of the settlement, you’ll be in trouble if they turn around and say that it’s not included in your policy. Always make other arrangements as a backup plan so you don’t land yourself in financial trouble.

Public Image

Getting involved in a lawsuit doesn’t do any favors for your company. It damages your public image a lot, especially if it’s a high profile lawsuit. That doesn’t mean you can’t get through it but you’ll need to be careful about the way that you handle it.

Get in touch with a good PR company and get them in to help you. They’ll have good experience in dealing with situations like this so they’ll know how to limit the damage. It’s important that you listen to their instructions and follow them properly. Often, they’ll tell you that the best thing to do initially is not make any comment.

This sometimes seems like it makes you appear more guilty but you’ve got to remember that the media are going to read into every little comment that you make and your words can easily be taken the wrong way. When they do think that it’s appropriate for you to comment on the lawsuit publicly, make sure that you’re letting them draft a statement and you’re sticking to it, you never know when you’ll make it worse.

After the lawsuit is over you need to start rebuilding your image regardless of the outcome. You may have lost the trust of some of your customers so you need to be putting extra efforts into marketing to bring in new ones and focus heavily on your public image so you can avoid being defined by the lawsuit.

Getting into legal trouble is never ideal but if you’re running a business, you need to be aware that it happens more than you think. If you handle it in the wrong way then it could mean the end of your company but if you follow these steps, you can come out the other side and carry on as normal.  

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  • alex baker says:

    Thank you for sharing such an informative post.
    alex baker recently posted…How Does the Judge Decide a Bail Amount?My Profile

  • alex baker says:

    Thanks for sharing this wonderful article.

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