How to Respond to a Threat of Legal Action

There are many circumstances that could lead a person to threaten you with legal action. Regardless of whether the threat seems legitimate, it is best to consult with an attorney before taking any action that could result in a discrimination lawsuit.

It is important to remember that threatening another with legal action can constitute an act of violence. This is why it is important to follow these guidelines when responding to a threat of legal action:

1. Keep Calm

If you are a non-hermit adult, there is a good chance that you have been threatened with a frivolous lawsuit at least once. This is something that can be extremely stressful, especially if it is your job to manage customer disputes. However, you can help to protect yourself and your business by following the tips below.

When someone threatens legal action, it can be easy to panic and become overwhelmed by fear. However, you must remember that most threats never result in legal action. If you can keep calm and remember that they probably have their own agenda, you may be able to work things out with them.

People who routinely threaten baseless lawsuits are often just adult versions of playground bullies. They are mad at you, and instead of trying to work out their issues in a mature way or by talking about them like considerate adults, they choose to make a threat and scare you. They want you to lie awake at night worrying, as this gives them a sense of power.

It is important to document everything. This means logging the threat date and any specifics you can recall and hanging on to any paperwork that illustrates your side of the story. This may include emails, financial statements, contracts, or any other written documents. Do not destroy anything that may be relevant to a potential legal case, as you could face serious consequences for doing so.

Another thing to consider is that it can be illegal to threaten legal action if you do not have a valid reason for doing so. This is because it can constitute a form of harassment, and in some cases, this can lead to criminal charges.

When in doubt, it is always best to speak with a lawyer, even if only by phone or email. This can help set your mind at ease and give you confidence that you are acting according to the law.

If you receive a legal document that looks like a subpoena, you should immediately contact an attorney to discuss your options. The attorneys at Greening Law Group are here to help, so please do not hesitate to reach out to us.

2. Do Your Homework

Before you can take legal action against someone, you must generally give them formal notice of your intent to do so. This is often done through a letter called a demand letter, which may also be known as a lawyer’s letter or a formal notice or “mise en demeure.” Receiving a demand letter can be scary and overwhelming, but it’s important to carefully analyze the contents of the letter in order to understand what is being asked of you. While the CMLP cannot provide specific legal advice regarding your specific situation, this guide can help you determine how best to respond to a threat of legal action.

3. Talk to a Lawyer

When you’re dealing with a potentially serious legal issue, it’s always best to seek the advice of an expert. Even if the threat seems frivolous, it may be worth considering how to approach the situation under your business’s insurance policy, particularly in light of your other policies (like privacy and data protection).

It’s also crucial to make sure you talk to a lawyer as soon as possible, especially if the letter includes a specific deadline for responding. This gives you the most time to properly evaluate the case and determine how to proceed, which can ultimately be more beneficial in the long run.

A “demand letter” is a legal notice that typically outlines the reason for a potential lawsuit. It’s generally good practice to respond to these kinds of letters because it puts both you and the other party on notice, thereby preventing the other person from later claiming they weren’t aware of the circumstances.

However, if you don’t have access to a lawyer, it’s still important to carefully evaluate the situation and follow your business’s internal case escalation procedures. This will help you prevent saying something that could be construed as harassment, which is an offense that can lead to fines and other penalties.

If you do decide to 4. Do Not Disregard the Letter

Whether from a disgruntled customer, an angry former employee, or an aggrieved vendor, someone is likely to threaten legal action against you at some point during your business journey. While the majority of these threats do not result in actual lawsuits, they can be intimidating and distracting for a small business owner. Keeping calm and evaluating the correspondence is the best way to determine your next steps.

When you receive a letter that hints at legal action, start by looking closely at the details to see what, if anything, can be done about it. First, determine whether the letter is, in fact, a formal legal document. Check the signature for an address and/or phone number. If this information is present, the letter is probably a formal document, such as a demand or complaint, that needs to be taken seriously. If the letter is from a solicitor or is signed with “Lawyer’s Client” or “Client’s Matter” or includes words such as “Suit” or “Action,” it is probably a summons and must be responded to as described in our sections on Responding to Lawsuits and Responding to Subpoenas.

If the letter appears to be a cease-and-desist letter or contains terms such as “breach of contract,” “intentional infliction of emotional distress,” or “infringement” and demands that you stop engaging in certain activities, refer to our section on Protecting Yourself Against Copyright Claims for more information on how to handle these claims. If the letter relates to material posted by a user on your website, you can also check out our section on CDA 230 for more guidance in determining how to proceed.

Finally, if the letter is a threat to sue, you should evaluate it in light of your insurance coverage. It is likely that your business carries liability insurance that will cover most types of lawsuits. However, it is essential that you familiarize yourself with the terms of your insurance policy so that you understand what might need to be reported to the insurance company and what might not.

While the majority of legal threats are not carried out, it is important to take them seriously and evaluate every threat on its merits. Follow the tips on this page to help ensure that your team is able to keep customers happy, even when faced with the threat of legal action.