Here’s one disaster you might not have considered in your preps…

A lawsuit.

Yes, a good old fashioned lawsuit can be devastating to life as you know it, and well worth preparing yourself for.

They cost a TON of $$$
They take a ton of time.
They destroy strained relationships.
They consume your thoughts.
They zap your energy.

They suck.

Lawsuits can stem from a number of different sources. Think about it:

  • Pissed Off Customers. If you own a small business, chances are you deal with angry customers from time to time. They don’t feel like they’ve been treated fairly, they’re not satisfied with your attempts to make it right…Boom! Lawsuit.
  • Business Partner. Even though business relationships usually begin with high hopes and the best of intentions, in many cases it doesn’t take much for things to go south. Questions of ownership, compensation, and intellectual property are quick to spark lawsuits.
  • Divorce. Along the same lines as a breakup with a business partner, a divorce can put you in a lawsuit in a hurry. As unfortunate as it is to talk about, this is statistically the most likely lawsuit people have to deal with.
  • Estate Issues. Dividing up physical property of the deceased is sticky business. Even though estates are typically planned out well in advance of someone’s passing, they still prove to be a frequent cause for lawsuit.
  • Dispute Over Services (home repairs, construction, mechanic, etc). What about the contractor or handyman that you hired that never showed up? Or even worse, maybe he showed up and now your house has an extra hole in it? In a perfect world, every contractor would be licensed, bonded and insured, but it’s just simply not a reality.

There are other situations that can land you in a lawsuit, but these are a handful of the usual suspects.

So what can be done?

As preppers, here are a couple proactive steps to consider taking:

1) Consider Legal “Insurance.”

Companies like Legal Shield offer legal services on a monthly premium basis, just like insurance. At the price of roughly $20 a month, participants have access to:

  • Letters and phone calls from a local law office on your behalf
  • Document review (for contracts and documents 10 pages or less)
  • Will preparation
  • Car accident assistance and other motor vehicle related issues
  • Defense representation if summoned to trial (a certain amount of trial representation is included in the plan, and then additional hours are offered on a discounted basis).
  • General legal advice on personal, business, or pre-existing conditions
  • Services not covered in plan are offered at a discount.

Legal Shield also includes additional tiers of service at an additional premium, for more comprehensive legal needs and a specialized identity theft team.

2) Do Business In Writing.

This is kind of a no-brainer, but can be the best defense you have in a lawsuit situation. Some circumstances are harder to do this in than others. The good news is that even handwritten notes, emails, and even text messages can hold significant weight in court, so you don’t have to worry about it being super official.

Email can be a realistic middle ground, especially for business communications. In particular, try to have written record of every conversation where working agreements, responsibilities, and compensation are outlined, and ESPECIALLY when things begin to get tense.

If you have a heated phone call with your business partner or a customer, it’s a good idea to follow up quickly with a brief email that says something like, “Just to recap our conversation from a couple minutes ago…”

3) Consider Mediation or Arbitration.

In many cases, mediation could potentially save you time, money, and a bunch of unnecessary formalities. Additionally, you get a ton more privacy than traditional court litigation (whose records and evidence submitted are public).

However there are some drawbacks.

As with pretty much everything in the legal world, fees apply. And while most people agree that 3rd party mediation is a quicker and therefore cheaper process than public court litigation, it can still be expensive. Typically you will have attorney fees and share the fees of the mediator.

If 3rd party mediation is not a good fit for your situation, you may want to consider a binding arbitration as a final step before filing suit with the courthouse.

Springer’s Final Thought…

Make sure to investigate these options objectively, to decide whether or not they make sense for you.

If you can make it through life on this planet without getting into legal hot water, you are a rare human being. But for the other 99% of us, this is one situation where “an ounce of prevention is worth a pound of cure.”

Additional Resources:

  • If, When, and Where to File a Lawsuit? For a host of information related to demand letters, limitations of each state, filing suit for internet conflicts, determining the validity of your case, and much more.
  • Steps of a Lawsuit–Walks you through the different steps of filing a formal lawsuit in the court system.
  • Legal Shield–Get your legal “insurance” here. Descriptions of various plan options and coverage limits. Figure out if this is something that makes sense for you and your family.
  • Legal Zoom–For low cost and no fuss legal filings such as business incorporation, trademark registering, wills, and more.

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