There are countless reasons as to why a person would want to sue a company. In general, some common reasons to sue a company include the following:
- The company illegally terminated an individual
- If a person suffered harassment when either working at the company or when visiting the company as a patron (e.g., grocery store worker harassed them)
- When a company fails to pay a worker their hard-earned salary or if the company does not return money that is owed (like a security deposit)
- A company may have misled them about product claims or their financial situation (e.g., an investor might sue if they were led to believe that a company would be profitable and it caused them financial harm)
- They infringed a person’s intellectual property rights or plagiarized their work
- The company breached a contract or warranty
- The company injured the person in some way (e.g., they failed to maintain safe premises, an employee of the company may have hurt the person, or a product made by the company caused the person harm)
What Types of Lawsuits Can Be Initiated Against a Company?
Just like there are countless reasons to sue a company, there are also various legal theories on which a lawsuit might be based. Some common types of legal theories that company lawsuits might be based on include:
- Personal injury
- Products liability
- Professional malpractice
- Premises liability
- Breach of contract
- Discrimination or harassment
- Nuisance
- Defamation
- Tax fraud
- False advertising
- Violations of federal laws
The process to sue a company will differ depending on the type of company, the laws in the jurisdiction, the facts of a specific matter, and the legal theories that a claim is based on.
For example, a person who brings a personal injury claim will most likely be suing a company for negligence. In order to show that a company was negligent, the plaintiff will have to prove that:
- The company owed them a certain level of care (i.e., duty of care) due to their relationship (e.g., employer-employee, doctor-patient), or status (e.g., invitees, licensees, trespassers).
- The company breached that duty when they acted in a manner that fell below the standard level of care that a company or individual in the same situation would have ordinarily avoided.
- The company was the actual and proximate cause of the plaintiff’s injuries.
- The plaintiff suffered actual, quantifiable damages as a result of the company’s negligent behavior.
What Types of Companies Can Be Liable?
Almost any company can be held liable for actions that violate federal, state, and/or local laws. Some types of companies that may be held liable include:
- For-profit companies (e.g., corporations, limited liability companies, partnerships, etc.)
- Non-profit organizations (such as charities)
- Small business owners and solo practitioners
- Federal, state, and/or local government agencies
- Schools, hospitals, retail chain stores, and various other types of companies
Different business structures result in different forms of liability. For example, if a person sues a corporation, both the corporation itself and its individual owners can be sued for damages. On the other hand, if a person is suing an LLC (as opposed to a corporation), only the organization itself can be sued for damages. LLCs are specifically structured to help individual owners avoid liability for issues or debts incurred by a business.
How Do You Sue a Company for Damages?
In order to sue a company for damages, a plaintiff should take the following steps to increase their chances of bringing a successful lawsuit:
- Before initiating a lawsuit, it may be wise to speak to a company representative to ensure that there is not an easier way to resolve the issue. Oftentimes, a company will want to retain its customers, so they may work with an individual who feels they were wronged and try to fix the problem outside of court. Start by reporting any issues to the company and be sure to put it in writing.
- Only if the company refuses or fails to fix the issue should an individual then consider suing and turning to a lawyer for help.
- If the company refuses or fails to fix the issue, begin collecting information and evidence that will support the claim. For example, if an individual is suing a company based on a claim for sexual harassment, then they should save emails, reports, letters, get the contact information for any witnesses, business policies, and so on to use as evidentiary support.
- While it is better to consult a lawyer for this next step, an individual should start considering what types of claims they have and what kinds of damages they want to recover if their case is successful. For instance, in a products liability case, does the individual want to receive monetary damages for their injuries, or do they simply want the defective product replaced?
- Also, if a case involves only minor amounts of monetary damages, then the individual should consider filing their claim in a local small claims court. This can save both time and legal costs. Although a person can represent themselves in small claims court (and usually do), they may still want to consult a lawyer for advice or to answer any questions they may have about their case.
- If the plaintiff decides to hire a lawyer, then at this point their lawyer will take over to discuss next steps and legal strategies. On the other hand, if a plaintiff is representing themselves or is filing in small claims court, they should review local court rules, the laws governing their case, and find out how much time they have to file their lawsuit (i.e., what is the statute of limitations in the state in which they are filing?).
- The plaintiff will need to file a complaint, serve the defendant company with notice, prepare their case, respond to motions, gather evidence, and subpoena any necessary witnesses. The plaintiff should also expect to pay filing fees.
As discussed above, plaintiffs who bring a successful case can potentially recover a number of damages, such as monetary damages or replacement products. Some other remedies that might be available when suing a small business include:
- Requesting that the court issue an order stating the company is legally obligated to change their company handbooks, policies, and/or procedures
- Various economic and noneconomic damages
- Punitive damages or fines
- Restitution
How Long Do You Have to File a Lawsuit Against a Company?
As is the case with most lawsuits, a plaintiff will only have a certain amount of time from when an incident occurred to file a lawsuit. This period of time is set by laws known as the “statutes of limitations”. The deadline to file a lawsuit will depend on the laws where a plaintiff files their case and the reason why the lawsuit is being filed.
For instance, a person who sues a company in California based on a personal injury claim, will have two years from the date they were injured to file a lawsuit against that company. In contrast, a person who sues a company in Florida based on a personal injury claim, will have four years from the date they were injured to file a lawsuit against that company.
A person who fails to file a claim within the prescribed time frame will be barred from bringing a lawsuit against the company. Thus, it is very important to know how much time the law allows to file a lawsuit for a specific claim and to file that claim before the time expires.
Although an individual may do this by reviewing local laws, they may want to speak to a business lawyer to be safe. Otherwise, they could miss out on recovering damages for their injuries.
Are There Any Alternatives to Filing a Lawsuit Against a Company?
Yes, there are alternatives to filing a lawsuit in court that an individual may be able to use to resolve an issue they have with a company. One commonly used category of dispute settlement is called alternative dispute resolution (ADR).
ADR includes processes such as mediation and arbitration. ADR processes are less formal than courtroom trials.
Mediation allows the parties to meet with a neutral third party who helps guide them to a resolution that works for all involved. Arbitration is slightly more formal and binding, as the parties present their arguments to an arbitrator, who issues a decision.
Another way that issues and disputes can be resolved outside of a courtroom are settlement agreements. These are commonly used in many different types of cases, such as divorces, medical malpractice claims, and automobile accident claims.
Even though these processes occur outside of a courtroom, it is still very important to have legal representation for all of them. All of these processes can be complex and involve substantial negotiations between the parties.
There may also be legal consequences that the parties would not be aware of if they did not receive advice from their attorney. Having the assistance of a lawyer during out-of-court resolutions helps ensure that both parties are treated fairly, their rights are protected, and the outcome is acceptable to all.
Do I Need a Lawyer to Sue a Company?
Both state and federal court systems can be quite complicated to navigate without the help of a lawyer. A lawsuit requires knowing the proper legal procedures and strategies, such as which court to file in, what claims to bring, which defenses to anticipate, whether to go to trial or settle outside of court, how to conduct discovery, what type of evidence to look for, and so on.
In addition, companies typically have unlimited resources to fight lawsuits when compared to individuals. They also may have an entire in-house team of lawyers who are hired precisely for this reason. Therefore, if you decide you want to sue a company, it may be in your best interest to consult a local business lawyer for further legal advice.
An experienced business lawyer can discuss whether you have a viable claim and what your best options are for legal recourse. Your lawyer can also help you to gather evidence, request the right items for discovery, and assist you in preparing and filing your claim. Finally, whether the company decides to settle out of court or if you need to go to trial, your lawyer can represent you during either legal procedure as well.
