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What to Expect When You are the Target of a Lawsuit

It’s frightening for most business owners to receive notice of a personal injury or premises liability lawsuit, and one of the first questions lawyers are asked is whether to settle the suit and for how much. The good news is that a majority of suits settle, usually within the limits of insurance coverage, and those plaintiffs who insist on going to trial generally have weak cases. 

While our advice on most matters involving the law is to never make a move without first talking to your lawyer, your insurance agent is the first person you should call when you are sued. Then, immediately call your lawyer. Whether the claim is covered by your policy, the policy limit and the amount of retention – or deductible – will be major factors in how the case is handled. 

Business defendants may be surprised to hear that many cases settle before getting even close to a trial. But, determining a realistic settlement that satisfies both sides is complex and depends on a number of factors. 

Assessing liability is the starting point  

The first prong of our analysis will consider the likelihood that you will be held liable under the law. The results of this assessment sometimes surprise business defendants, since liability under the law may run counter to a lay assessment of who is at fault. 

For example, slip and fall cases in South Carolina are extremely hard for plaintiffs to win, because the state courts have set a high bar for liability. Essentially, in order to establish liability, a plaintiff must show that a defendant knew or should have known about a hazard that caused a fall. However, there are also many other situations where the law seems to favor plaintiffs. 

The potential for damages is also important. In many personal injury cases, the issue isn’t who was at fault, but the extent of the injuries, particularly if they involve soft tissue damage – ligaments, muscles and tendons – that are harder to verify. 

Your insurance coverage is central to our strategy

What happens next can vary, depending on how your policy is written. In most instances, insurance carriers will pick up the cost of your defense, even if there is a dispute about whether the policy excludes coverage for the alleged injury. 

Carriers also have different philosophies on how aggressively they manage the litigation and whether you can choose your own attorney. We encourage our clients to periodically review their insurance policies, and weigh the advantages or disadvantages of different insurance plans. 

Most insurance companies will ask for a litigation budget. They’ll want to know: do you need expert witnesses, how many witnesses will be called, how long will a trial take, and how much time will go into depositions and other pre-trial work? 

We know the litigation landscape of South Carolina 

As we get deeper into a case, we’ll also take stock of the credibility of each side’s witnesses, as well as whether the venue leans toward defendants or plaintiffs. We’ll also size up opposing counsel; there are some lawyers who we know are rarely serious about going to court, and others who never bluff. As a firm with deep roots in South Carolina, we know the peculiarities of each county, and we’ve had experience with most of the state’s law firms. 

Trial strategy or the decision to settle always includes the insurance company since it’s generally paying most of the bill. Under most policies, the insurance company has the absolute right to settle. Both insurance companies and lawyers are experienced at assessing risks, and we know a business defendant can be frustrated when a case settles in which he or she doesn’t feel at fault. As lawyers, we have monitored hundreds or even thousands of other cases, and our advice is always informed by the verdicts and settlements we’ve seen in cases with similar elements. 

To be sure, a lawsuit is a major aggravation for any business, but in most cases, it’s unlikely you will end up in trial. A good insurance policy coupled with a law firm that understands how to resolve matters before they advance to trial, usually will prevent lawsuits from progressing from an aggravation to a crisis. Be sure you have built these essential relationships with an insurance carrier and the right law firm before trouble arrives. 

For more on this topic, my colleague Tom Kennaday recently authored a blog post on Considerations for Whether, When and How Much to Pay to Settle Litigation

Audra M. Byrd is an attorney in the Myrtle Beach office of Turner Padget, where she has an active commercial and business torts litigation practice. She routinely assists her corporate clients with debt collection and contract disputes. She may be reached at (843) 213-5520 or by email at abyrd@turnerpadget.com

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