On Reddit’s small business subreddit, there is a post where someone received a complaint filed against their small business and later updated everyone about the process. This update was posted recently in December of 2022, and the original post was from two years ago.
A class-action lawsuit was filed against one very small business, and there were also complaints filed against other local competitors. A lawyer represented a group of the competitors for a flat fee. The original poster said it was “a couple of thousand dollars,” and that was as long as it didn’t go to trial.
There were a couple of months of negotiations with one to two Zoom mediation sessions, and they settled for $5,000. The poster originally declined the settlement offer, but the plaintiff moved for discovery, and they decided it wasn’t worth spending any more time on. So, they settled for $5,000.
This was a low-cost settlement when you consider that $5,000 went to the plaintiffs. The poster said they only paid out a couple of thousand because the lawyer agreed to represent a group all at once for a flat fee. This is one way that you could potentially lower your cost of settlement – by grouping together with other local businesses that have been targeted in litigation. It’s an unconventional approach to defense but one that netted the defendant a few thousand dollars in the end.
I wanted to relay this story because it sheds light on an unconventional way to approach defense that could be helpful for other small businesses facing similar legal challenges. You can find more information on this Reddit thread by following the link below.