My company is being sued - what should I do?

[david13]

I own a small limited company publishing business. My wife and I are co-directors and I am the only full-time employee.

Unfortunately, due to an online news story I wrote last year, somebody has filed a defamation claim for £100,000 against my company. The claim is extremely spurious and I have been advised it is extremely unlikely to succeed. The claimant is serious though and is of the 'go down in flames' type. I have sought legal advice and been advised that putting a defence together will cost £3000+ and if it goes to trial, hearing costs could be £20k. Unfortunately I did not renew my media insurance earlier this year.

My company has no debts but I absolutely do not want the stress and expense of a legal battle.

I am therefore considering the option of folding the company and restarting under a different name. The defamation claim is against the company, not myself.

Can anyone advise of any downsides to this route or anything I would need to be wary of?

Any thoughts gratefully received.

 

[mattk]

I presume you wrote the article under your personal name? I'd have thought the biggest downside would be you folding the company and then him taking out the claim against your directly.

 

[david13]

It is under my personal name but the claim is against the company. We are actually co-defendants with another publisher, a global company!

Surely I have directors' liability protection as a director of a limited company?

 

[fisicx]

I defended myself a few years back. Didn't have any money so couldn't pay for a lawyer. They gave up long before we got to court as I asked for clarification on every point in their letters and repeatedly told then there was no money. Even if they won the case I'd have been paying back a few quid each money for years. So they gave up in exchange for a promise not to do it again.

 

[Chris Ashdown]

Is it in your hands or the global companies hands

You should be discussing this matter with the other co defendants legal team, who may well have the might to stop the claim

 

[Szymon Krzyzanowski]

Please also remember that in some cases, the court may decide to lift the limited liability "veil" depending on the details. Its rare but it happens.

 

[ImranR]

You should check if you have some sort of liability insurance and if so, pass it on to your insurers to deal with the defence.

It sounds to me that your name is a last minute addition and that their real target is the other company who probably have the funds to pay the damages.

You should check your contract with the other company as the relationship between you will be crucial.

 

[paulears]

You could always defend yourself if you are certain the claim really is spurious?

 

[JEREMY HAWKE]

what is the size of the claimant ie individual or large company ?

 

[John Hemming]

These are complicated things and you could end up being sued in person as well. It is probably worth seeing if you can negotiate a retraction or something. However, if they have paid £10K in court fees they are probably unable to do that psychologically.

I have won a number of defamation cases and also been on the receiving end of threats. The law is really complicated so it is worth talking to specialists about it.

 

[Aniela]

Were the things you said about the person/their company things that you can back up with proof/evidence or did you make malicious claims based on things you pieced together?

 

[kulture]

We’re you insured at the time you published the piece? It may be worth looking at the wording of the policy as it may cover you.

 

[James_RawlinsInsurance]

It firstly falls under your Professional Indemnity Insurance in the first instance which if you wrote the article for the larger company I would pass this onto them to deal with. If he decides to come after you personally this is directors and officers insurance, which sometimes gets thrown in as part of your "Media Insurance Package" so check that out. This policy protects "you" personally as director and senior decision maker in the business.

Did you write the article prior to lapsing your own insurance?

 

[Deleted member 333097]

Is the other side self-representing or using a law firm?

 

[STK Finance Limited]

Hi David
Were the things that were said actually true? One of the main defences to a defamation case is that what was said was true...

Also, how much money do you think the claimant has got? You can ask them to put up security for costs and it might stop the claim before it even gets started if they can’t afford it. What that means is they would need to pay the court about £30k now so that you know that if you successfully defend the claim, you will get your costs back. It’s a strategic tactic which a lot of defendants use in early litigation...