You’ve Been Served: The Costs of Being Sued

At some point in your career, you could find yourself involved in a lawsuit. Despite being a diligent, thorough professional, an unhappy client could seek legal action for damage as a consequence of your service.

There are a wide variety of reasons for a client to sue: misuse of confidential information, inaccurate data, wrong advice given, the list goes on. Professional indemnity insurance prevents the fees associated with a lawsuit from harming your business, and is mandatory for solicitors, accountants and many others – learn more about it here.

Legal fees

Before even thinking of settlements, defending or admitting liability, get some legal advice. Arrange a consultation with a lawyer to talk through your case, and see what they say. If and when you decide to hire a legal professional, they should talk you through the exact cost of their services (which could include a fee for the consultation), and it depends on a few different things like type of service and specific conditions of the case.

If you or your business end up being convicted (of professional negligence or other offenses), you must pay the cost of defending yourself – and there is no Legal Aid available to businesses, only individuals. According to Law Donut, court costs are fairly low in the magistrate’s court, but can end up being significantly higher in Crowd Court fraud cases.

Reputation management

Based on the outcome of the case – and the level of publicity it receives, you could find yourself at the centre of some very negative press. For example, as a consequence of being sued, when you search your company name, the first three results that come up are negative articles about the case.

This could harm your future professional endeavours, so it’s important to push these damaging results off the front pages. Depending on how extensive the work is (the strength of the domain hosting the content, the type of site, how good your online presence already, etc.), you could be paying anywhere from around £2000 to £16000 for the issue to be resolved.


Team morale

Another serious aspect of being sued is the effect it will have on your workers. Low levels of team morale can lead to decreased productivity, poor customer service and low employee retention. This will also translate into hefty costs like providing incentives to your staff to boost enthusiasm, hiring new employees if your workers find employment elsewhere, and potentially losing existing clients.


This article has been produced in collaboration with Aon UK Limited. Whilst care has been taken in the production of this publication and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the publication or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it.  In any case any recipient shall be entirely responsible for the use to which it puts this publication

This publication has been compiled using information available to us up to 16/07/15

Images: lawsuit and pressure via shutterstock


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