Receiving a legal threat, whether it is in a letter, email or face-to-face, can be overwhelming. You may feel the urge to panic, ignore the threat or react emotionally, but none of these reactions will help you in the long run. A calm, structured response based on a sound legal strategy is what can help.
Don’t Ignore It — Even If It Seems Baseless
One of the most common mistakes people make when faced with a lawsuit is to dismiss it as a bluff. However, under the Federal Rules of Civil Procedure, plaintiffs have significant freedom in initiating legal action, and courts take deadlines very seriously. If you ignore a formal letter or summons, you could end up with a default judgment against you, meaning the other party will win automatically because you did not respond.
Even if the claim against you seems unfounded, treat every potential threat seriously until a lawyer advises you otherwise.
Preserve All Evidence Immediately
When litigation is threatened, it is your legal responsibility to preserve relevant documents, emails, contracts, and other communications. Failing to do so could lead to spoliation, which is a court-imposed penalty for the destruction or loss of evidence.
Practical steps include:
- Suspending any regular document deletion policies.
- Saving all written and electronic communications related to the dispute.
- Documenting the timeline of events while your memory is still fresh.
Courts have increasingly imposed electronic discovery (e-discovery) requirements. Failure to comply with these requirements can significantly weaken your case, even if the underlying facts of your case are strong.
Review the Demand Letter Carefully
A formal demand letter is often the first step in the process before a lawsuit is filed. This letter typically identifies the legal claims that are being made, the amount of damages that are sought, and the deadline for a response. In Wisconsin, failure to respond to these letters can lead to additional fees being imposed or limit your ability to defend yourself in court.
Please read this carefully and note the deadlines. Before replying to the sender, consult with legal counsel, as anything you say may be used against you in future legal proceedings.
Contact an Experienced Litigation Attorney Right Away
At this stage, time is your most valuable resource. The earlier you consult with an attorney, the better your options will be. A skilled attorney can help you determine if your claim has legal grounds, identify potential defenses, and choose the most cost-effective course of action. This could mean negotiating a settlement, exploring alternative dispute resolution methods like mediation or arbitration, or building a strong courtroom case.
At Kerkman & Dunn, we combine the experience of a national firm with the personalized attention of a boutique in our Milwaukee litigation practice. We know how to approach disputes strategically, not just legally, and our goal is always to resolve matters efficiently while protecting your interests.
Understand Your Insurance Coverage
Many business and professional liability insurance policies provide coverage for legal defense costs. Please review your commercial general liability (CGL) insurance policy and any errors and omissions (E&O) insurance coverage you may have. If you have questions about your policy, please contact your insurance company as soon as possible. Late notification can void your right to receive coverage under the terms of your policy.
Your attorney can also help you coordinate with your insurance company to ensure that coverage is not inadvertently waived.
Explore All Resolution Pathways
Not every dispute needs to end up in a courtroom. The Wisconsin courts actively promote mediation as a way to resolve disputes more quickly and at a lower cost. Depending on the specifics of the case, a negotiated settlement can protect your reputation, save you legal fees, and provide a quicker resolution than going to trial.
Our firm is equally adept at resolving disputes outside of court when it serves your interests, but we are fully prepared to take legal action if necessary.
The Bottom Line
Being threatened with a lawsuit doesn’t mean that you will necessarily lose, but how you handle the situation in the first few days and weeks is crucial. It’s important to preserve your evidence, adhere to all deadlines, and seek qualified legal advice as soon as possible.
The Milwaukee-based litigation attorneys at Kerkman & Dunn are here to help. Whether you’re facing a commercial dispute, a contract claim, or complex financial litigation, we provide common-sense legal strategies with a proven track record. If you have any questions or need assistance, please contact us today for a consultation.
