What Happens When a Corporation Gets Sued?

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A lawsuit is defined as a legal dispute between two or more parties that must be resolved by a court of law. A party suing a corporation and filing the lawsuit is known as the plaintiff, while the corporation being sued is known as the defendant. While different types of lawsuits follow different trajectories through the legal system, there are some basic steps that most lawsuits follow.

A Lawsuit is Filed

The first step in a corporation getting sued takes place when the plaintiff files a complaint with either state or federal court, depending on the nature of the dispute. State court handles criminal cases, tort or personal injury, and contract law, so a lawsuit involving a breach of contract or workplace accident would be handled at this level. Federal court handles bankruptcy, constitutional law and issues related to U.S. law. A lawsuit that charges an equal rights violation or discrimination allegations would be filed in federal court. Once the complaint is filed with the appropriate the court, a copy of the complaint is delivered or “served” to the defendant. The complaint filed by the plaintiff outlines the specific reason for the lawsuit and explains the terms the plaintiff seeks from the court in order to satisfy the complaint.

Request for Relief

A plaintiff uses a lawsuit to seek “relief” from the court, typically in the form of monetary compensation or in the form of a court order to halt specified behavior or actions. For example, an employee suing a corporation because she believes she is not being given appropriate overtime pay would file a complaint that states her case and defines how much past compensation she believes she is due. The complaint would also ask the court to order the corporation to pay the employee what she is owed and to adjust its future overtime calculations to ensure the issue does not reach lawsuit status again in the future.

Dispute Resolution

Once the corporation, or defendant, has reviewed the plaintiff’s complaint, it may opt to acknowledge its error and “settle out of court,” or make restitution to the plaintiff without going through the court system. In this instance, a corporation would typically pay the plaintiff’s back pay and/or her legal costs. If a corporation disputes it is in the wrong, the lawsuit will move forward.


Once a lawsuit against a corporation moves forward, both the plaintiff and the defendant must go through a process called “discovery,” in which attorneys for each side trade information they have that is pertinent to proving their client’s case. For example, using the same scenario, the attorney for the plaintiff may present time cards or paycheck stubs that indicate hours worked and hours paid. The defendant, the corporation, would provide documentation they have that supports their case, such as an employee contract that stipulates a salary compensation over hourly compensation.


If a case is not settled at any point during the pre-trial process, a trial will be scheduled. During a trial, both the corporation and the plaintiff have the opportunity to call witnesses and present evidence to a judge and/or jury. Once both sides state their cases, the judge and/or jury will make a decision about which party is in the wrong and order appropriate compensation or punishment.

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