Corporate Compliance: Avoiding and Preparing for a Lawsuit
A business should always be prepared for a lawsuit, and the best time to prepare for one is before any possible legal claims arise. Corporate compliance can go a long way in preparing for and avoiding a lawsuit. If a business has a self-monitored corporate compliance plan and audits its own practices consistently, it will not only avoid potential lawsuits, but have self-preserving support in the case of a lawsuit.
Organization is the most important way to prepare for a lawsuit against your business. By cataloging documents and maintaining an accurate calendar, a business can help prove lawful dealings and interactions. For example, in some cases it may be necessary to prove how much work was performed and when it was performed. An accurate calendar could help evidence meetings, timelines, and transactions. If you keep your documents and calendar on your computer or in the cloud, it is advised that you back it up several times a month to ensure it is not lost or destroyed
Minutes or some other kind of notes should be kept for not only business meetings regarding organization or formation, but for all business dealings. Many business lawsuits involve alleged misrepresentations, disclosures, broken promises, or misunderstandings. If a company makes it a practice to train employees on taking minutes, it will be easier to prove certain positions or agreements in court. All business employees should be encouraged to record general subjects of discussion, who was present at a meeting, discussions about risks or concerns, and whether there was an agreement or disagreement.
In addition to keeping all business contracts, you should also keep all contract drafts. Businesses go back and forth, and sometimes one side may not track a change in an agreement. To help resolve a contract dispute, you may be able to prove the intent of the parties from deleted or added provisions to an agreement.
These are a few suggestions to be prepared, whether as a plaintiff or as a defendant in case of a business lawsuit. Depending on the type of business practice, there may be state or federal regulations requiring certain additional compliance measures. Corporate compliance measures from similar industries can also be helpful guidelines in establishing your own business policies.