What to Do if Your Business is Facing a Civil Lawsuit

If you own a business and you face a lawsuit it will most likely be a civil case. But what are civil cases? Civil cases are brought to the court by a party (the plaintiff) who says another party (the defendant) did something to cause them an unfair loss. Usually, to make up for the loss the plaintiff would ask for some kind of restitution. A process server usually helps those who have a civil process and investigative needs.

If you find yourself confused between the difference between a civil case and a criminal case, criminal cases involve crimes and crimes are acts that threaten the safety, health, or the welfare of others. For criminal cases, there is a punishment involved that serves as a consequence if the defendant is proven guilty. Civil cases on the other hand aim to end the conflict through a resolution of some sort; usually, a cash settlement is asked as a part of or restitution.

What disputes lead to civil lawsuits?

The goal of a civil lawsuit is to end a dispute between two parties. Before any dispute can be resolved it is important to identify first what wrongs caused it. Most civil wrongs that small businesses encounter are called torts. Torts are divided into several categories, including but not limited to:

Property torts

For example, you are a mechanic who specializes in superbikes. One day a Ducati is brought into your shop because the owner wants to have it checked and ready for his race. While you were working on the bike it fell and the bike was destroyed. It couldn’t be fixed because it needed a part that was hard to find. The bike owner sues you for not only the cost of your service but also asks for a cash settlement for the damages.

Liability torts

For example, you own a restaurant and you served a customer food that gave her severe allergic reactions due to an undeclared ingredient that you claim to be a “secret ingredient”. The customer files a lawsuit against your business.

Dignitary torts

For example, you are a freelance photographer who worked with a company for a project, you then tweeted about the company having an incompetent team. The company saw the tweet and then sued you for defamation and claiming that your tweet is untrue and that it damages their business’s image.

Infringement liability

For example, you have a small coffee shop in your town. You have been getting more and more customers because of your social media presence. There’s one particular drink that is very popular among those who visit your cafe and you unknowingly named that drink similar to a drink that Starbucks has. Because of your popularity, Starbucks was informed and they threaten to sue you for trademark infringement.


For example, you own a tutoring center, the mother of one student came to see you to confront you because even with your services her child is being held back a grade. The mother claims you didn’t help her child and that you weren’t doing your job so she sues you for the cost of tutoring and some cash settlement because of the hassle and trauma to compensate for what happened to her child.

To deal with a civil lawsuit it is helpful to have errors and omissions insurance. It will make the whole process of facing a lawsuit easier. Your case could even be dismissed, dropped, or settled.

Interesting Related Article: “What does a civil lawyer do, and what are 3 ways they can help your case?