Abusive or frivolous lawsuits have the ability to cripple the finances of even large, well established businesses. The impact that these meritless lawsuits can have on a small to medium business is even more damaging. In fact, a single frivolous lawsuit has the ability to put many small business owners out of business completely. Thankfully, while you may not be able to stop an overly litigious individual from filing an abusive suit against you, there are steps that you can take to help minimize the impact this type of lawsuit will have on your business while also ensuring that your small business does not become an easy target for someone looking to cash in by filing a frivolous claim.
Work With A Lawyer Before A Claim Is Filed
Far too many small business owners fail to take any action to protect their personal and business assets prior to a lawsuit being filed against them. Unfortunately, in these situations the law greatly limits what actions can be taken in order to shield assets from being seized as part of a judgment.
By choosing to work closely with a qualified lawyer prior to a claim being flied against you, you will be able to design an effective asset protection plan that can stop abusive lawsuits from destroying your small business. For instance, your lawyer may be able to help you shield certain assets by placing them under the control of a separate company. This approach can greatly limit the number of assets a plaintiff would have access to in order to collect a judgement against you in the event that you are sued.
Knowing When To Fight And When To Settle
Another important aspect of dealing with frivolous lawsuits is knowing when to fight and when to settle a claim. While some companies take the approach of settling as many claims as possible out of court, taking this approach can leave you more vulnerable to abusive lawsuits as litigious individuals get wind of the fact that your company is eager to settle any complaints with out-of-court settlements. At the same point in time, you do not want to risk high dollar settlements by taking claims to court that are not likely to be ruled in your favor. An experienced lawyer can help you to determine what the most likely outcome of a particular claim is so that you can ultimately decide whether to defend yourself against the claim in court or offer an out-of-court settlement in order to minimize the financial damage caused by the suit.
Reach out to a professional for more information about how to stop abusive lawsuits.