Sued as an Executive in California? Don’t Make These Mistakes

Being named individually in a California civil lawsuit is a serious matter that demands immediate and careful action. Yet time and again, executives in Los Angeles — from Beverly Hills and Santa Monica to Downtown LA and the broader metropolitan area — make the same critical mistakes in the wake of being sued that end up making an already difficult situation dramatically worse. Understanding these mistakes before you make them could be the most important thing you read today.
The first and most damaging mistake is attempting to handle the situation informally. Many executives instinctively reach out to the opposing party — a former business partner, an ex-employee, a competitor — hoping to resolve the matter with a direct conversation. This almost always backfires. Anything you say can be used against you in the litigation, and informal agreements made without legal counsel are rarely enforceable and often create new legal problems.
The second mistake is underestimating the seriousness of the claims because you believe they lack merit. Meritless lawsuits are filed in California courts every day — and some of them result in significant judgments. California’s civil jury system in Los Angeles is unpredictable, and even weak cases carry settlement value because of the cost and disruption of litigation. Your civil defense attorney will assess the actual risk, not the one you’re telling yourself.
Third, many executives fail to preserve documents. Once litigation is reasonably anticipated — which happens the moment you receive a demand letter or learn that a lawsuit is being contemplated — there is a legal duty to preserve all relevant communications and records. Deleting emails or texts, even if done routinely as part of normal operations, can result in serious sanctions and adverse inferences at trial.
Fourth, failing to disclose the lawsuit to your D&O insurer promptly can void your coverage. Most D&O policies require timely notice as a condition of coverage. Missing that window is an expensive mistake.
Best Civil Attorneys provides immediate, experienced defense representation for executives throughout Los Angeles County. Contact us today — the sooner you have counsel, the better your position.