What Should You Do If Your Business Gets Sued?

What would you do if your business was sued for millions of dollars?

This is not a hypothetical question for Norfolk Southern Corporation, a major railroad company that is facing a lawsuit from victims of a train derailment that caused an oil spill in Ohio in 2019.

Watts Guerra LLC for Ohio train derailment lawsuit asserts that Norfolk Southern Corporation acted negligently and violated environmental laws. The lawsuit claims that the company’s operation of a train carrying hazardous materials led to a derailment near Cleveland, causing contamination of land and water in multiple communities.

This case is a wake-up call for all business owners who might face similar situations in the future due to their business activities and products, as these lawsuits can have serious reputational, financial, operational, and legal consequences.

In this article, we’ll share some general steps and tips for handling a business lawsuit effectively, based on the advice of lawyers and experts. By following them, you can minimize the negative impact of a lawsuit on your business operations.

#1) Steps and Tips for Handling a Business Lawsuit

Want to handle a business lawsuit professionally? 

With the right guidance and knowledge, you can.

Here are the top 6 steps & tips that will help you protect your business interests, reputation, and assets, all while minimizing the negative impact of a lawsuit on your business operations. 

#2) Review the case with an attorney

Before you take any action or make any statements in response to a lawsuit, you should consult with an experienced business attorney who can:

  • assess the merits of your case
  • advise you on your legal rights and obligations
  • help you understand your options

This way, you’ll be able to make informed decisions about your defence strategy and you’ll understand which potential course of action (e.g. whether to settle or proceed to trial) would be the most favourable to you.

#3) Inform Employees and Customers

Transparency is key. 

Once you’re aware of the lawsuit, inform your employees and customers as soon as possible about the situation.

Start by explaining what happened, which actions you are taking or planning to take, and how they might affect them. 

Assure them that you are addressing the issue responsibly and that operations will continue as usual. It’s also advisable to apologize for any inconvenience or harm caused by the lawsuit, as oftentimes a simple “sorry” can go a long way.

The point is, that clear communication can help maintain trust and mitigate potential fallout.

#4) Preserve Evidence

That includes but isn’t limited to:

  • documents
  • records
  • emails
  • texts
  • photos
  • videos
  • receipts
  • invoices
  • contracts

Also, collect any information from witnesses or experts who can testify on your behalf.

To identify and secure all the pertinent materials that may be crucial to building a strong defence, you should work alongside an experienced business attorney. 

This step is essential for presenting your case effectively and minimizing potential damages.

#5) Maintain Open Communication with Your Lawyer

Establish clear lines of communication with your attorney. 

Regular updates about the progress of your case, timely responses to inquiries, and collaborative strategy discussions are essential for building a strong defence. 

Oh, and another important thing: trust your lawyer.

Follow their instructions and cooperate with their requests. 

If or when you have doubts or concerns about their strategy or tactics, ask questions.

You need to stay actively involved in your case to ensure that your legal representation aligns with your business objectives.

#6) Negotiate a Settlement or Prepare for Trial

Sometimes, the option of negotiating a settlement makes for a better resolution than going to court. 

Settlements through arbitration or mediation can often be a faster and more cost-effective solution, which can spare your business from prolonged legal battles. 

However, if negotiations fail or your case is too complex and severe to be handled through alternative means of dispute resolution, you should be prepared to go to trial and vigorously defend your interests there.

#7) Protect Your Assets

During legal proceedings, never forget to take measures to protect your business assets from being seized or garnished by another party. 

This may involve:

  • reviewing or obtaining insurance coverage
  • exploring indemnification agreements
  • keeping track of your income and expenses
  • paying all your bills on time
  • maintaining accurate financial records, and
  • implementing other measures of strategic financial planning

Asset protection is important for ensuring the long-term viability of your business.

#8) Specific Implications and Challenges of a Business Lawsuit

A business lawsuit can have far-reaching effects on various aspects of your operations, impacting customer loyalty, employee morale, supplier relationships, industry standards, and more. 

Below are some of the implications and challenges associated with a lawsuit stemming from your business activities or products:

#9) Reputation Management

A lawsuit can impact your business’s reputation, big time.

If it does, and that’s the first time you’re thinking about how to address public relations in regards to the issue, you’re already on your way to losing the battle.

In other words, you need to be proactive. 

Communicate openly with the media. Demonstrate accountability and emphasize your commitment to resolving the issue. 

And ultimately, consider implementing reputation management strategies to rebuild trust in the aftermath of legal challenges.

#10) Financial Considerations

Here’s another thing legal battles can strain: your financial resources. 

Yup, and to stop that from happening, you should carefully review your business insurance policies to understand coverage and available options for mitigating financial risks. 

Implement a contingency plan to ensure continued financial stability throughout the entire legal process.

#11) Operational Disruptions

Lawsuits can throw a wrench into your day-to-day operations, causing disruptions that ripple across your business. 

But, if you follow our earlier suggestion and craft a contingency plan, you’ll not only take care of your finances – but also cushion the blow on your business processes.

Moreover, engaging with key stakeholders, such as suppliers and clients, can be another strategic move that can help you maintain operational continuity. 

By keeping the lines of communication open, you can set expectations, foster understanding, and ensure that your business sails through these challenges with minimal turbulence. 

#12) Legal Liability

Your legal liability is something you need to understand to be able to assess the potential risks associated with your business activities or products.

Does the evidence strongly indicate your business’s liability? You might want to settle, then.

Would you like to maintain a positive relationship with the opposing party? Negotiation can foster goodwill and potentially preserve future business collaborations.

Or, if your legal team believes you have a strong defence or there’s a principle at stake, proceeding to trial may be the right option for securing a favourable judgment and defending your business’s integrity.

Either way, we suggest you work closely with your business attorney to evaluate potential outcomes and develop the right defence strategy for you and your case. 


While being sued poses significant challenges, a proactive and strategic approach can help your business weather the storm.

Consult with legal experts, communicate transparently, preserve evidence diligently, and take steps to protect your assets. 

By addressing the specific implications of a lawsuit head-on, you can emerge from the legal ordeal with your business’s reputation, finances, and operations intact. 

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