I’m thinking about filing a lawsuit to collect money owed to my business. What does the process involve? How long will it take?

Although every case is different, most follow the same general pattern. They all begin with initial filings, which are usually followed by the discovery process. There will likely be hearings on various motions at some point. Most suits will be ordered to mediation to see if they can be settled before trial. If settlement is not possible, a trial will follow mediation. The time involved can vary widely from suit to suit, but in this series of posts, we will explain each step in the process and provide you with a basic outline of the life cycle of a lawsuit.

The first thing your small business must do, even before filing suit, is hire an attorney. North Carolina law actually prohibits an LLC or corporation from appearing in court on its own behalf; only a licensed attorney can file legal documents or make court appearances for your business. Even if a lawyer was not required, hiring one would still make good business sense. The litigation process is full of complex rules and procedures. If you make a mistake on one of them, you risk losing before getting a chance to prove your case.

The first phase of a lawsuit is the initial filing phase. This process starts with the drafting and filing of the Complaint. In theory, this is just a short, plain statement of what the other party did wrong, what legal claims you are asserting, and what compensation you are seeking. In practice, it gets more complex. If the right claims are not made in the right way, you run the risk of having your suit thrown out of court right at the beginning of the process. If you forget to make some claims or request certain types of relief, you might be prevented from adding them at a later date. A Civil Summons is also filed with the Complaint. The Summons is the official document that gives the defendant notice that suit has been filed against him. Serving the Summons and Complaint is one of those procedures that has to be performed according to the specific rules of civil procedure. The right person must receive the Summons and Complaint and they have to be delivered in a certain manner. If you serve the wrong person, or deliver the Summons and Complaint the wrong way, you might be looking at a delay in your lawsuit or worse. The Summons is good for sixty days, but it can be renewed up to 90 days from issuance.

The defendant’s Answer is the next step in the opening phase of litigation. The defendant has thirty days from when he is served with the Summons and Complaint to file his Answer with the Court. In most cases, the defendant will request extra time to answer the suit. The Court will almost always grant a thirty day extension to answer, so long as the original thirty day time limit has not yet expired. Like the Complaint, the Answer is simple in theory – just a basic response to the facts alleged by the plaintiff. In practice, however, this is a critical step of the process. The Answer will typically list numerous defenses as to why the defendant is not liable. If certain defenses are omitted, they are waived and cannot be asserted later on. The Answer might also include counterclaims and cross-claims. Counterclaims are basically a lawsuit that the defendant files against you; if he meets his burden of proof, then you would liable. Cross-claims are claims that the defendant asserts against other people. Each counter or cross-claim has to be answered within thirty days by the appropriate party unless an extension is obtained. If the defendant does not file an Answer within the appropriate time, you may be entitled to a default judgment, which is an judgment determining that defendant is liable to you and carries the full weight of the law even though you obtained it without having to go to court.

This first phase of litigation can go very quickly, or it can drag on for a long time. If you’re suing just one person, get them properly served, and they do not request an extension to answer or make counter or cross-claims, it can be over in a month or so. If you’re suing multiple defendants, have trouble serving them, or there are counter or cross-claims, this first phase can easily drag out for many months. After the first phase is complete, the parties move into the discovery phase and this will be addressed in a later post.

While the legal process seems relatively straightforward, it is fraught with nuances that can make or break your lawsuit or your defense. It is critically important to hire a seasoned attorney that can help you navigate these waters. At Miller & Monroe, we have extensive experience litigating business matters and we can offer you the help you need to obtain compensation or defend your business. If you thinking about pursuing legal action or if you have been sued, contact Miller & Monroe today for a consultation.

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