Client Alert: The COVID-19 Litigation Wave Is Coming – Be Prepared With Litigation Counsel Early

The fallout businesses are experiencing right now is significant. As with any crisis, there will be litigation spun from it and many businesses in our area may find themselves involved in litigation for the first time ever. It is hard to predict how large the legal fallout will be, but there will undoubtedly be a steady increase in litigation spilling over from the COVID-19 situation and businesses should be prepared to act quickly and smartly when a lawsuit comes in their door. While each day presently still involves important and difficult decisions related to basic business operations during COVID-19, do not let the litigation needs of your business fall to “tomorrow’s pile.” Stay on top of those needs and seek appropriate assistance from litigation counsel as soon as the threat of litigation arises.

Even during pre-COVID-19 times, the number one piece of practical advice a litigator would give a business client is to immediately contact litigation counsel when a complaint, or even a threat of litigation, comes in the door. Time is of the essence in the early stages of litigation and it is essential for litigation matters to involve litigation counsel.

Now more than ever – in the disruption of the novel coronavirus – when the target is constantly moving, when we are having to daily re-tool and are dealing with stressors and decisions that themselves are novel, it is tantamount that businesses remember this simple rule of thumb – call a litigator at the earliest signs of litigation. Businesses cannot fall prey to the thinking that a lawsuit it has been served with is “low priority” and “will be handled eventually.” As businesses are re-opening and continuing to deal with COVID-19-related issues, directors and officers of all businesses should remember that formal litigation, and even litigation threats, are not for “tomorrow’s pile.”

Involvement of litigation counsel early is key for several reasons, including the following:

1. Avoidance of default: Defendants in a lawsuit usually have a short period, somewhere between 21-30 days, to respond to the allegations in a complaint filed against them. Failure to timely respond can result in entry of a default judgment. Thus, litigation counsel needs to be timely engaged so that deadlines are not missed.
2. Time to prepare an adequate response: Answering a complaint is not a check-the-box task. Often times there is a factual background relevant to the complaint that the attorney needs to unpack with the business client. More often than not, litigation counsel needs time to conduct legal research to evaluate what legal defenses may be available to the client. The earlier counsel is engaged by the client, the more time there is to prepare a thorough and complete response on behalf of the client.
3. Document preservation requirements: Service of a complaint (or sometimes, threats of litigation) can trigger duties on businesses to preserve relevant documents. Ignoring a complaint runs the risk that relevant evidence could be lost which can have negative consequences for a party in the litigation process. Seeking the assistance of litigation counsel early can help address all preservation issues.
4. Pre-suit resolution: Similar to complaints, do not ignore demand letters or other communications that threaten litigation. Involve litigation counsel in these preliminary discussions. Litigation counsel can assist with a pre-suit resolution that could possibly avoid a lawsuit altogether.
5. Possible future cost containment: Engaging litigation counsel at the first sign of litigation can help avoid certain pitfalls that could result in costly attorney time to handle at a later date. When business bottom lines are strained right now, it is easy to wince at the idea of litigation fees, but an ounce of prevention is worth a pound of cure.

Our litigation team at Manning Fulton stands ready to assist with any business, employment or insurance dispute your business may encounter in the coming weeks and months ahead. Please reach out to your Manning Fulton attorney so that we can help you plan for weathering the storm of litigation. If you do not have a current litigation need right now, but just have some basic questions about the litigation process, please do not hesitate to contact us.