Preliminary Investigations

As described in greater detail in Nexio Law Firm’s last article – How to Deal with a Demand Letter – we discussed why proper risk management mandates you treat Demand Letters seriously.  The same is true of lawsuits. It’s important to start with the right mindset.

Remain calm and think things through carefully. Before providing a response, the recipient should understand the legal issues involved in - and implicated by - their past and future conduct. In this article, we discuss some of the specific steps that should be considered as part of the initial (preliminary) investigation:

Preliminary Investigation
  1. Hire an attorney as soon as possible. This isn’t for the reason you might think. It’s because people tend to be more emotional after receiving a Demand (or a Lawsuit). Emotional responses often lead actions that may not be well-thought through in the end analysis. Hiring an attorney can provide a sounding board.  It also creates a shield over most of what you do after receiving a Demand, if done in the right way. Have you ever heard of the attorney-client privilege?  Hiring an attorney allows you to have open discussions amongst your team and lawyer. Those conversations then become protected by the attorney-client privilege. Also, if you take certain actions at an attorney’s request after receiving the Demand, those actions presumably fall within the attorney-client privilege. But be cautious, not everything you do will be protected. An attorney can provide guidance about what can and cannot be covered by the privilege, as well as ensure you have the best chance of acting within that shield. 
  1. Ask your attorney to give you list of things to collect. A capable attorney will generate a list that looks similar, if not identical to, the remaining items below. If the attorney does not produce a list like this, then you can offer to gather the remaining items below (Nos. 3 through 9) if he/she thinks this would be prudent.
  2. Identify people inside and outside your organization. Create a list those who know the facts about the Demand and give this list to your attorney as soon as possible.
  3. Identify documents and communications that relate to the Demand. Set these documents aside for safekeeping and give these documents to your attorney as soon as possible.
  4. Draft a short story explaining what you know about the demand. This serves two purposes. First, it helps you collect your thoughts. Second, it provides a guide for your attorney to understand what facts might exist and where further investigation is necessary. This short story should be later built into a statement of all known facts.
  5. Put a litigation hold in place. This basically means instating a policy to prevent any records from being deleted or modified, whether manually or automatically. It’s usually best to have your computer consultants make copies of hard drives and servers for safekeeping.
  6. Explore insurance. Does your insurance cover the claim?  Get copies of all policies over the past few years and ask your attorney to analyze them. Tender if/where possible.
  7. Identify possible claims against the sender. This is sometimes helpful for negotiating a better resolution.
  8. Identify anything else you think should be considered. Sometimes the smallest facts can have the largest impact.

Consulting with an experienced attorney can help you successfully navigate a Demand you receive and reach a satisfactory resolution that best serves you and your business.

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