4 Ways Your Business Can Recover After Losing a Lawsuit


Losing a lawsuit can be your worst nightmare as a business owner. It could be that you came out with a product that hurt someone, or maybe it killed them. Their family may seek compensation, and you might end up losing a jury verdict after months or even years of highly emotional courtroom battles.

Once the dust settles, you must determine whether your business can move past this event. Some companies close after losing this type of suit, but you might feel determined to press on with your vision. This type of situation represents a setback, but it might not completely kill your dreams for the business entity you started.

Let’s talk about specific ways you can get past this challenging time and continue with promoting and running your company.

You Must Pay Whatever Economic Damages the Court Determined You Owe the Plaintiff

In these sorts of civil cases, you can try to settle with the defendant out of court. Your lawyer might advise you that’s the best way to handle things if it’s obvious you’re not going to get a favorable jury verdict. If you settle out of court, you might not have to pay the plaintiff as much money as if you allowed a jury to determine your innocence or guilt.

Assuming you allowed the trial to proceed to a jury verdict, though, you’re taking a risk. If the jury decides against you and your company, you will have to pay whatever economic damages they feel are appropriate. That may easily be tens of thousands of dollars or more, depending on how badly your product injured the individual in question.

You’ll Have to Address Any Criminal Charges the Court System Brings Against You

There are a couple of kinds of trials: criminal and civil. If someone sues you for something like product liability, or if they trip and fall inside your store, hurting themselves, they will try to hold you accountable. That’s a civil lawsuit.

Civil lawsuits result from complaints that private citizens bring against you as a company operator or owner. If many of your products injured people, they might form a class action lawsuit against you. Since you now have many plaintiffs going after you instead of one, you may have to pay out many millions of dollars if you lose.

However, there are also criminal cases that the police and court system might bring against you. These are separate from civil lawsuits. The police could decide to bring a criminal case against you in addition to the civil suit that your client or customer does.

If you’re looking at both a criminal case and a civil one, you have to deal with both of those. You might get away with paying the disgruntled customer a sum of money to satisfy them from a legal standpoint, but then, you will also have to hire an attorney to help you with the criminal case you’re fighting.

If you lose that criminal case, you could end up in jail, so, in some respects, that’s an even more serious situation than potentially having to shut your business down because you had to pay someone a large settlement after a civil lawsuit from which you came out on the losing end.

You Might Have to Hire a Crisis Management Team

Let’s say you had to pay someone a great deal of money following a civil lawsuit loss. You either settled with them, or else you lost a jury’s decision. You have to pay millions of dollars because one of your products injured someone.

Now, you are left trying to pick up the pieces and continue with your business. You’re trying to make it profitable again. The problem is that the trial was highly publicized, and your company got a lot of negative press because of it.

In this situation, you must do all you can to try and get your former and future customers to trust you again. It won’t be easy, and that’s why you should consider hiring a crisis management team.

These are firms or individuals who know all about crisis management. They might offer you rebranding suggestions. Perhaps they’ll tell you that you need to scrap your company’s name entirely and call it something else, even if you’re offering essentially the same services or products.

If you wish to stick with the same company name, they might tell you that you need to offer a heartfelt public apology. You need to seem contrite, and you need to make it clear that you’ve learned from your mistakes and that nothing like what took place will ever happen again.

If you can do that, it’s probably the best chance you have to regain face and eventually turn a profit again. If you’re defiant and insist you did nothing wrong, even after losing a high-profile lawsuit, that might drive even your few remaining loyal customers away.

You’ll Need to Do a Better Job with Your R and D Department

Many product liability lawsuits stem from faulty products. Maybe you made a product with inferior materials, and that’s what hurt someone, or more than one person if a group of individuals brought a class action lawsuit against you.

It could be that you allowed that product to get onto store shelves without testing it as much as you should have. You may have done that because you felt like other companies were getting ahead of you and dominating the market, and you needed to try and catch up as fast as possible.

The R and D department needs to be very meticulous about what they allow to reach the general public, though. If they feel like a product is good enough, but there are clearly still some things wrong with it, they need to spend more time figuring out how to fix it. If they don’t, another lawsuit might be in your future, and this one might finish your company for good.

Cover Photo by Sora Shimazaki from Pexels

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