Being Sued

1. First Defensive Steps

If you are served a claim form, follow these steps.

1.1 Consult legal representatives.

It is usually worth seeking legal advice, even if only to ask about admitting liability and making a reasonable offer of settlement.

• A director or officer of your company can appear for the company.
• Directors and officers named separately as defendants may be personally liable. Establish whether you will need separate lawyers.

1.2 Act promptly, following the legal formalities to the letter.

• You must respond within 14 days to a High Court or county court claim. Otherwise, the claimant can obtain judgment in default against you (see 4.3).

1.3 Decide what to do.

You can make an offer to settle (see 1.4), admit liability (see 2) or defend the case (see 3).

• It may make financial sense to settle, even if you believe the claimant has a weak case.
• If you win, you are unlikely to recoup all your costs. If you lose, you may have to pay most or all of the claimant's costs, as well as your own.

1.4 A formal offer to settle, (a Part 36 offer) for part of the amount of the claim may settle the dispute.

• There is a good chance that the claimant will accept a compromise offer, rather than risk spending time and money pursuing a court case.It can save both of you significant costs.
• You may need to make a 'payment into court' if your ability to pay is in question.
• If the claimant later wins the amount you offered (or paid in), or less, the claimant will have to pay some of your costs.