May22

Boilerplate Contract Language By Design, Not By Accident

Posted on May 22, 2011 by Jeff Huron

Do you skip the boring boilerplate in contracts before signing them? If so, you could be in for a big surprise later if there is a contract dispute.  Before you sign any contract, you should focus on how disputes will get resolved. You are best served if there is language that provides for each of the following: (1) mediation prior to litigation; (2) reimbursement of attorneys' fees; and (3) litigation, not arbitration.

MEDIATION FIRST: Although the majority of lawsuits are settled, it is usually after the parties have incurred substantial attorneys' fees. Mediation should occur early and often until the dispute is resolved. Your next contract should therefore make mediation mandatory before either side may file a lawsuit. Anyone who sues first, loses his or her right to recover attorneys' fees.

ATTORNEYS' FEES: You want to discourage lawsuits by ensuring that the loser pays the winner's legal fees. The fee language should be broad enough to cover any dispute arising out of or related to the contract.

LITIGATION, NOT ARBITRATION: In arbitration, you give up the right to a jury trial and an appeal. This means that your stuck with a bad decision--even an incorrect one--unless you can prove the arbitrator was biased. Arbitration is also expensive and often inefficient.

Tags: , , , , , ,
Sep15

What To Do When You Are Sued!

Posted on September 15, 2010 by Jeff Huron

When you are sued, you should react just as a battleship when it comes under attack because you are under attack. Alarm bells should go off and you should immediately act to prevent or contain damage. The following actions will help protect you after you have been sued:

  1. Contact Your Insurance Company. Review all of your insurance policies for possible coverage.  Immediately notify your broker and insurance company if you believe you might be covered under your policy. You may lose coverage if you delay notifying your insurance company of the lawsuit.  If you are covered, your insurer will defend you in the suit and hold your harmless from any loss.  If it is unclear whether your policy provides for coverage, the insurer may have to defend you or your business even it is later determined that your policy does not provide for coverage.  Therefore, err on the side of coverage and document your conversations with your broker and insurer.  Remember, however, your conversations with your broker are not privileged and may be used against you by the insurer in evaluating whether there is coverage.
  2. Begin Preparing Your Defense.  Read and understand the complaint before talking to an attorney. Note your initial responses to the allegations and provide them to your attorney as soon as possible.  Gather all of your documents, including emails. Record and save any voice messages that may be useful to your defense. Talk to witnesses.  If they say anything that supports your defense, send them a letter or email confirming their statements to you.
  3. Hire the Right Attorney.  Do not wait for the insurance company to hire an attorney for you. In many cases, the insurance company will take more than 20 days to accept or deny coverage. Give yourself time to hire the right attorney.  For example, hiring an attorney with no (or very little) trial experience is probably not the right choice, especially in high-stakes litigation. 
  4. The Best Defense Is A Good Offense. Give serious thought about whether you have any grounds for asserting claims against the plaintiff. If you do, then you should countersue the defendant. Make sure you and your attorney thoroughly explore grounds for a countersuit because a countersuit will put the plaintiff on the defensive and give you leverage in settlement discussions.  
  5. Stay Proactive.  Communicate with your attorney regularly. Make suggestions and recommendations concerning your defense.  Success depends on employing the right tactics at the right time as much as the merits of your defense. Let your attorney know if you do not agree with his or her defense tactics.  You know your adversary best and should provide as much insight as possible to your attorney about your adversary's motivations, strengths and weaknesses.
Tags: , , , , , , ,
Apr09

Tenacity and Creative Thinking Are Always Rewarded

Posted on April 9, 2009 by Jeff Huron

It should not surprise you, but your opponent will play hide the ball and avoid getting pinned down.  Yet many attorneys are not tenacious or creative enough about ensuring victory.  Litigators must think outside the box!  How can you get evidence you need to win your case?  There are always creative ways to locate evidence that your opponent fails to produce.  Here are two examples.

  1. We had a case where it was critical to show that the plaintiff controlled a corporation that had received funds as a result of a lender's mistake.  At his deposition, plaintiff testified that he had not heard of the corporation and had not received money from it.  Most people bank near their homes or work.  We identified the banks within a mile of the plaintiff's office and then subpoenaed records pertaining to the corporation from each of them.  Bingo!  One of the banks produced records, including checks signed by the plaintiff to himself, his wife, lawyer, etc.  Case over.
  2. A lawyer whose client died in a helicopter crash sued the helicopter company, alleging that a defective part caused the crash.  The company did not produce any documents helpful to plaintiff's case.  The plaintiff's lawyer researched other helicopter accidents and learned of a similar accident, which led to the discovery of a prior lawsuit against the company in another state.  After tracking down the other plaintiff's lawyer, obtaining and sifting through old files, there it was - an internal company memorandum recommending a recall of the part.  The result: a $14 million verdict in a case that the lawyer would have otherwise lost.

Tenacity and creative thinking pay off.  Are you doing enough to win your case?

Tags: , , , ,