How to ensure your business survives a law suit
The fear of facing a lawsuit certainly has the capacity to keep a business owner awake at night.
However, businesses do face lawsuits and survive, so while it may be a stressful time, a lawsuit doesn't have to spell disaster. Much of how the lawsuit goes and how your business gets through it depend on how you handle the proceedings, and whether you get the right help.
Here are some points to consider in order to assist your business survive that dreaded lawsuit, should it come.
It's easy to panic when you open an innocuous looking envelope to find a statement of claim - a document notifying you of another party's intent to undertake legal proceedings against you. However, the most damaging thing you can do at this stage is ignore the situation.
Under Australian law, you have 28 days from the date the statement of claim is served to respond to it - if you don't, you risk a judgment being made against you.
At this point it's a good idea to engage your own lawyer.
Having sound legal advice can make all the difference to how your case goes. A lawyer will be able to advise you on how to respond, and how to handle the proceedings.
Open a dialog
Don't assume that receiving a statement of claim means a messy court case is inevitable.
You may find it beneficial to contact the party who has filed the claim, to see if some sort of agreement can be reached. If you are in New South Wales, the Small Business Commissioner Bill 2013 means mediation is a legal requirement before court proceedings - if you are not, it still makes good business sense to try and reach an agreement with the other party, negating the need to go to court.
If you decide to write or email with the intent of settling the issue between your business and the other party, be sure your correspondence is professional, calm, and measured.
Only make statements or offers that you can back up, and don't give in to the temptation to make it personal or overly emotional.
Know your plan
If it becomes clear that your case is going to proceed, you and your lawyer will need to draw up a plan.
The first thing to decide is whether to admit the claim or defend it. It's easy to say "I want to win!", but the best thing you can do for your business is to discuss with your lawyer which path and which outcome are going to be less damaging to your business in the long term.
In some cases, the better choice is to defend the claim, in others to settle it as quickly as possible.
A case in point is that of Annie Young, owner of a Sydney family business which produces a range of teas known as Honest Tea.
When Coca Cola started legal proceedings against the company for the right to use the trademark, Young was certain that standing her ground was the right thing to do.
The case was eventually dropped.
Once court proceedings have begun, it's vital that you document everything - any contact from the other party or their lawyer and any actions you take. However, documenting everything starts before the case.
Of course you hope you will never end up in court, but if you do the chances are your businesses records will be under scrutiny.
Keeping good records and copies of correspondence with clients now could help you in the future.
Take the case of Jason Bouman versus Australian Traffic Network.
When ATN transferred him from his post, citing issues with his appearance and presentation, Bouman was able to provide copies of emails from the National Operations Manager, confirming that ATN was happy with his work.
The case was eventually settled out of court.
As Bouman's case shows, everything you say really can be taken down and used as evidence against you.
Should you find yourself entangled in court proceedings, make public statements only when you must, and remain professional at all times when speaking of the case. To shore up against potential future problems, be mindful of the words you choose when dealing with others.
There's no doubt that facing a court case is a difficult and trying time for any business.
However, your business can survive and get back on its feet if you are organized, think your actions through, and take legal advice at the earliest opportunity.
About the author
Tristan Anwyn is an author who writes on subjects as diverse as health, marketing, how to improve reviews, and SEO.
Bytedance CFO to TikTok CEO in 5 weeks: who is Shou Zi Chew?
When the world’s most valuable startup ByteDance, owner of TikTok, snatched 39-year-old finance exec Shou Zi Chew from the clutches of Xiaomi back in March, and gave the 39-year-old the financial reins of the US$400bn valued company, it was pretty big news.
Not just because it was the first time Bytedance had employed a CFO or that he had landed the only other C-suite position besides CEO Zhang Yiming, but because rumours were swirling that Beijing-based Bytedance was about to float and Chew, who had previously taken Xiaomi through a successful IPO, was being brought on board to do the same.
However, just five weeks into his role as CFO of Bytedance, with speculation growing as to the when and where of an IPO, Chew, who is a Singapore national, landed the top job (CEO) at TikTok too – a role currently considered to be the biggest job in tech – in addition to retaining his CFO position at parent company Bytedance.
The world's most challenging roles?
That's quite a responsibility. Not just because of the popularity of TikTok (think 689 million users worldwide and the world's most downloaded non-gaming app in the first quarter of 2021) and the revenue of Bytedance (US$37bn in 2020), but because the data privacy complications that TikTok and Bytedance have been enduring for a while now, with Chinese and US governments, are not going away.
Complications that led to the departure of TikTok’s previous CEO, former Disney exec Kevin Mayer after just three months in the job, when during his tenure the US government issued two executive orders within eight days aimed at forcing ByteDance to divest TikTok's operations in the US. This is far from TikTok's, or rather, Chew's only challenge. With India, once TikTok's fastest-growing market, now having banned the platform for political reasons, the challenge for Chew will be, where to grow TikTok?
This will no doubt be a business imperative for Chew, in finding a way to both grow the platform and to restructure the business to meet regulatory requirements both demanded by the US and Beijing. As will taking Bytedance through its initial public offering, something that has been rumoured about. According to Reuters, ByteDance has been considering whether to go for a standalone public listing for Douyin, the Chinese version of TikTok, or list some of its Chinese operations, including Douyin and news aggregator Jinri Toutiao, as a package in Hong Kong or Shanghai.
Why is Chew the man for the biggest job in tech?
So, who is this man with so much responsibility on his Singaporean shoulders? And more importantly, is he up to the job(s)? Well, he's used to working with billionaires, having worked for Russian billionaire Yuri Milner‘s internet investment firm DST for five years. In fact, it was here, at DST, in 2013 that Chew first came across Bytedance and where he led a team as early investors in ByteDance – what was then just a small startup housed in a Beijing residential flat.
Chew's credentials are pretty impressive too. Not only does he have an economics degree from University College London and an MBA from the Harvard Business School, where he spent a summer working for a then startup (Facebook), but his experience in some of the world's top companies straddles both tech and finance.
Chew began his working life in investment banking at Goldman Sachs, where he focused on technology, media and telecoms’ investments, before joining private equity firm DST Investment Management as a partner for five years.
He then joined Chinese electronics giant Xiaomi as Chief Financial Officer, where he was the youngest of the C-suite and where he was not only instrumental in securing much-needed financing from investors, but oversaw the company’s Hong Kong IPO in 2018, one of the largest-ever Chinese tech listings and the first-ever IPO in Hong Kiong Stock Exchange to realise dual-class shares.
He spent six years at Xiaomi before being snapped up by Bytedance. And according to the man who hired him, billionaire founder and CEO of Bytedance, Zhang Yiming, Chew's "deep knowledge of the company and industry” will add "depth to the team, focusing on areas including corporate governance and long-term business initiatives. I believe Chew's accession can help us further expand our global business."
Watch this space.