Businesses always want to handle litigation as efficiently as possible and obtain a successful outcome. However, efficiency and success become more important when the legal claim could mean the end of the business were the other party to win. If you are a business person or in an executive position, and you are facing a serious lawsuit, it is time to consider whether the case constitutes bet-the-company litigation, and if so, what you should do about it.

What is bet-the-company litigation?


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Bet-the-company litigation is any type of lawsuit or regulatory issue which, if resolved against the company, could put it out of business. Some bet-the-company litigation is dangerous because it could remove the company’s way of making a profit, like if a company lost a patent to make a certain product. However, bet-the-company litigation does not have to strike at the heart of the business model. Instead, it could simply be too expensive. A massive sexual harassment claim against a small business may be more than its bottom line can handle. Whenever a company faces this type of legal claim, it needs to take stock and prepare for how to survive.

Nine tips on how to survive bet-the-company litigation

If your company is facing risky litigation:

1. Consider all of the parties involved. 

Often, bet-the-company litigation involves legal issues on various fronts, and businesses need to consider many different parties. As a business, identify all of the parties directly and indirectly involved with or impacted by this case. This may include insiders to the business, such as employees, shareholders, the board of directors, and investors; those outside of the business, like customers, vendors, creditors, and insurance companies; and state and federal government agencies.

2. Review your insurance coverage. 

Businesses being hit with high-stakes lawsuits should review their insurance coverage as soon as possible. Professional liability insurance or other policies may provide defense coverage against certain types of claims.

3. Put someone in charge. 

A lawyer or single law firm should be the head of the team, coordinating all of the moving parts, attorneys, and employees involved with investigating the claim, developing a strategic response, and litigating the case.

4. Put someone in charge of discovery. 

Significant litigation is going to have a comprehensive discovery process, and this process needs to be handled efficiently. The more mistakes that are made during discovery, the worse it may be for your business. Make sure you put in charge someone who knows your business’s technology well and understands the high stakes involved with the discovery process.

5. Define team member’s roles. 

Many people inside and outside of the company will be working on various aspects of the litigation. Make sure each individual knows their job responsibilities, who they report to, and how they should communicate with other team members. Discretion and confidentiality are often important during these cases. Make sure all team members understand the importance of adhering to confidential communication and data security procedures.

6. Investigate thoroughly. 

The only way for a business to have realistic goals is to thoroughly understand the situation, which requires an in-depth investigation. If an individual or business is claiming you breached a contract or broke a law, you need to get to the bottom of the facts that support your defense and the facts that support the claimant’s case.

7. Conduct a cost-budget analysis. 

You need to have an objective look at the impending cost of the litigation and how the business will absorb that cost. The business may have to take cost-saving measures in order to afford the legal and PR team it needs to appropriately resolve the litigation.

8. Have clear litigation goals.

When facing a serious lawsuit, a business needs to determine its goals. Is the goal to win at any cost? Is the goal to walk away with minimal financial damage? The business’s goals will impact how the lawyers handle the case.

9. Do not ignore PR. 

If your business does not have a public relations professional in house, then hire a PR consultant or firm. One of the many ways bet-the-company litigation damages a business long before the case is resolved is by damaging the business’s reputation. A good PR professional will ward against unnecessary damage to the business’s public and industry image.

10. Get the right lawyers onboard.

Do not go a day longer without legal representation than you have to. You may have in-house lawyers, yet you will probably need outside attorneys too. Assembling the right team means there are enough hands on deck to handle all of the different issues that come with bet-the-company litigation.