"I've been sued! What do I do now?"

In preparing this article, the author received assistance from Andy Shepley of Guaranty Fund Management Services^SM and from his partners, Robert E. Murphy, Todd J. Hathaway, and Stephen J. Judge.

An Unpleasant Surprise

Your restaurant has been in the family for more than half a century. You took it over when your father retired in 1983; he took it over from your grandmother and grandfather who started it in 1946. Recently, while you were going over the accounts in your office, one of your waitresses knocked on the door and informed you that a deputy sheriff was waiting outside to speak with you. Such announcements usually do not portend good news so, when you left your office to speak with the deputy, it was with some reluctance.

The conversation was brief. The deputy handed you some official-looking papers. After you acknowledged receiving them, he left.

The document you received is entitled "Writ of Summons." It was signed by the clerk of one of New Hampshire's eleven superior courts and also by the attorney who prepared it. Additionally, it was verified by Mr. & Mrs. John & Edith Doe, who are identified as "the Plaintiffs." The pre-printed portion of the document states that it is "returnable the first Tuesday of" the following month, a date that was three weeks away. The rest of the document is entitled "Declaration" and begins as follows: "In a plea of the case, for that on or about August 21, 2005, the defendant XYZ Restaurant, Inc., was the owner of certain premises located at . . .."

The declaration goes on to relate in somewhat arcane legalese that Mr. Doe, while a customer in your restaurant, was served the special of the day and that it caused him to become violently ill within twelve hours thereafter. After expending much time and treasure upon doctors, hospitals, etc., and losing many weeks from gainful employment, he reached a medical endpoint; however, he was never able to regain the state of health he enjoyed prior to the day when he visited your establishment. In this narrative, you and your company are accused of negligence and of breaching implied warranties of merchantability and of fitness for a particular purpose under the Uniform Commercial Code.⁽¹⁾ Additionally, Mr. Doe claims that your company should be held strictly liable for selling a defective and unreasonably dangerous product. A jury trial on all issues is demanded, and the court is asked to award money damages to compensate Mr. Doe for his medical bills, lost income, pain and suffering and loss of enjoyment of life.

Toward the end of the declaration, Edith Doe makes a claim for "loss of consortium" as a result of all of the problems experienced by her husband.⁽²⁾

You vaguely recall having received a letter a couple of years ago from the Does' attorney. At the time, you reported the contact to your liability insurance carrier and subsequently gave a statement over the telephone to one of its representatives. You understood that the questions and answers were being recorded. You didn't hear any more about the incident and, after months went by, the matter faded from your memory. Having it brought to your attention in this somewhat dramatic manner has been unnerving. Neither you nor your restaurant has ever been involved in a lawsuit before and you are at a loss concerning what to do next.

The scene just described, while uncommon, is nonetheless something that many businesses experience occasionally. However, because it is not a common occurrence, most business owners are uncertain how to deal with it.

The purpose of this article is to give some guidance to business owners who have been sued. I will try to explain something about the process and hopefully take some of the anxiety out of it.

The general information outlined here can be helpful to gaining a basic understanding of the legal process in New Hampshire, but an article of this nature can only paint a picture of the litigation landscape with a broad brush. The legal principles applicable to an actual case are highly dependent upon the specific facts involved. Therefore, when serious personal or financial issues are at stake there is no substitute for a face to face consultation with a lawyer experienced in similar matters.

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The Nature of the Litigation Landscape

Although litigation has been a part of doing business in this state since well before the Revolution,⁽³⁾ it is more common now than it used to be. When something bad happens nowadays, people are less likely than in earlier times to simply accept the consequences, and are more inclined to look to the courts for resolution of their problems.

The justice system in the United States can be divided roughly into two categories: criminal and civil. Under the criminal justice system, the state enforces statutes against individuals and entities by imposing penalties for infractions. The aim of the civil justice system is redress, rather than punishment, with the state providing a forum for resolution of conflicts rather than acting as an enforcer.

Together, tort law⁽⁴⁾ and contract law make up the bulk of cases which occupy the civil justice system. Contract law deals with disputes arising from rights and responsibilities which are set by agreement. Resolution of such cases usually requires interpretation of a written or oral agreement to determine who assumed the risk that things would not go as planned. The focus of this article, however, is on tort law rather than on contract law. Tort law deals with obligations set by law, which arise from the nature of activities or relationships.

Most lawsuits claiming money damages for personal injury will be governed by the principles of tort law. With some exceptions, most such cases require a showing of fault, and involve an allegation of negligence.⁽⁵⁾ A plaintiff alleging negligence must prove: (1) that the defendant had a legal duty to the plaintiff to exercise care for his or her safety; (2) the defendant negligently breached that duty; and (3) as a result, the plaintiff was injured.⁽⁶⁾ The law that will be applied to these issues has evolved over time on a case-by-case basis. This is the so-called "common law" or judge-made law.

Often these days, the first element of a negligence claim (the duty of care) will be established by statute or local ordinance. For example, drivers of automobiles have always been governed by a common law duty to exercise reasonable care so as to avoid injury to others on the roadway. Drivers are also under a legislatively enacted duty to obey the statutes that govern the operation of motor vehicles - the so-called Rules of the Road.⁽⁷⁾ If there is a collision at an intersection controlled by a set of traffic lights, for example, it is usually the driver who had the red light who is held to be primarily responsible for the accident.⁽⁸⁾

Whether the nature of a relationship or activity gives rise to a duty of care under the common law will depend on whether injury to people such as the plaintiff is foreseeable.⁽⁹⁾ However, just because it may be foreseeable that an activity will cause harm to one class of people, it may not be foreseeable that the same activity would cause harm to others. In a famous case of the early 20^th Century, the employees of a railroad were accused of negligently causing a passenger to drop a wrapped package he was carrying. Unbeknownst to the railroad employees, the package contained fireworks. The resulting explosion caused a set of scales some distance from the event to become dislodged and to fall on another person (the plaintiff). The court in that case held that since injury to the plaintiff was not foreseeable to the railroad employees, there was no duty of care as to her, even if there might have been a duty of care to the passenger with the package.⁽¹⁰⁾

"Negligence is the failure to use reasonable care. Reasonable care is the degree of care which an ordinary, prudent person would use under the same or similar circumstances."⁽¹¹⁾ Generally speaking, the more an activity has potential for harm, the more effort will be expected of the actor to avoid that harm. For example, while a company hauling milk in tanker trucks must use a certain amount of care to avoid getting into an accident, far more care will be expected if the company hauls tankers full of chlorine gas or liquid propane.⁽¹²⁾

Put in economic terms, the primary purpose of tort law is to properly allocate the cost of risky activities. If operation of your business causes an unreasonable risk of harm to others, the aim of the law is to shift the cost of that harm from the persons who were injured to you - and ultimately to your customers, who must eventually be charged those costs when they purchase your goods or services.⁽¹³⁾

Society recognizes that businesses and their customers must not be forced to bear the costs of all harm that may be related to the business. For example, the fact that one of your trucks happens to be at an intersection at the same time as another vehicle does not, of itself, mean that your company will be held responsible for the collision that takes place as a result. We need to know more to determine who must ultimately bear the cost of the collision. Who had the green light - or the stop sign, for example? It is when there is a dispute concerning the effect of the rules that litigation results. Who should be held responsible, the injured person or someone else?

A company can only act through its people; therefore, the duty of care is, in reality, imposed upon the people associated with the company, whether the company is a sole-proprietorship, a partnership, a limited liability company, or a corporation. A company's legal responsibility for the actions of its people stems from the doctrine of respondeat superior. This is an ancient Latin phrase meaning "let the superior give answer." It is the legal principle under which an employer is held responsible for the acts of an employee done within the scope of his or her employment.

The more your company is in contact with the public, the greater the chance that at some time or another an injury will result from that contact. This is something you have to budget for if you run a business. One way or another you have to factor in and plan for the cost of litigation. Most businesses, of course, do this by buying liability insurance; however, it is increasingly common for some of the larger businesses to become self-insured for some or all risks associated with their operation.⁽¹⁴⁾

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The Initial Stages of a Lawsuit

The opening paragraphs of this article describe the most common way in which a lawsuit begins in this state. The plaintiff (the person claiming to have been injured by the fault of another) hires an attorney who drafts the writ of summons and causes it to be served on the person he or she claims should be held responsible. If the writ is to be served upon an individual, it must be given to that person in hand or left at that person's usual place of residence by a deputy sheriff of the county where the person resides.⁽¹⁵⁾ If the writ is brought against a corporation, service is usually made upon one of the company's officers or directors⁽¹⁶⁾ or upon its registered agent.⁽¹⁷⁾

If the lawsuit involves a question of federal law,⁽¹⁸⁾ or if the parties are citizens of different states, ¹⁹⁾ the lawsuit may be brought in federal court,⁽²⁰⁾ where the procedure for commencing the action is somewhat different. For one thing, in federal court the document in which all of the allegations are made is called a "complaint." It may be served upon the defendant by anyone 18 years or older who is not a party to the lawsuit.⁽²¹⁾ In common practice, most plaintiffs' attorneys will have service made by a deputy sheriff of the county where the defendant resides or has its primary place of business, the same as if the matter were brought in state court.

In federal cases, rather than going to the expense of having someone make actual service of process, it is more common for plaintiffs' attorneys to rely on a provision of the law that allows them to send a copy of the complaint directly to the defendant by mail along with a form to sign waiving further service of process. If the defendant refuses to sign that waiver, he or his company can get stuck with paying the cost of having formal service made by a deputy or someone else.⁽²²⁾

If the lawsuit could have been brought in federal court, but is instead brought in state court, the defendant may be able to have the matter removed from the state court to federal court.⁽²³⁾ If the only basis for removal, however, is diversity of citizenship, and if any defendant is a citizen of the state where suit is brought, removal is not allowed.⁽²⁴⁾

If the defendant is located outside the state, formal service is normally made on the New Hampshire Secretary of State in combination with registered or certified mail directly to the defendant. This is the normal way of making service on a non-resident individual under New Hampshire's so-called "Long Arm Statute."⁽²⁵⁾ Service on an out-of-state corporation requires only that the suit papers be served on the company's resident agent, if it has one, or sent by registered or certified mail if it does not.⁽²⁶⁾

There are specific requirements that must be met concerning service of suit papers, or "process." Therefore, the first item of business with which you should be concerned after being served is to determine whether the manner of service was adequate under the law. The rules that govern this can be complex, so you should speak with an attorney familiar with civil litigation as quickly as possible.

The trend these days for plaintiffs' attorneys is to request that the defendant's attorney, if known, accept service - with the client's permission, of course. If there is nothing unusual about the situation, it is normally in the defendant's best interest to agree to this course of action, since it avoids the embarrassment of having a deputy sheriff serve the papers in front of the business's employees, customers, etc. Your attorney should make sure that none of your rights are waived, except the formality of service.

The mere fact that a plaintiff has brought a lawsuit doesn't mean that anyone is being held responsible or that anyone will be held responsible for an incident, injuries, or an accident. Nor does it mean that there has been some sort of official stamp of approval on the plaintiff's cause of action. Nobody needs permission to bring a lawsuit. People can sue anyone for just about anything they want, so long as they can make plausible arguments in support of their claims.⁽²⁷⁾ The filing of a complaint or writ of summons is just the means, that is, the process for placing a dispute, real or imagined, into the system so that it can be resolved.

On the other hand, this does not mean that a lawsuit is something that you should ever take lightly. A lawsuit is usually commenced only after an attorney on the other side has made a business judgment that filing suit against you is in his or her own and the client's best interest. Most plaintiffs' attorneys are paid on a contingency basis. That is, if they win, they are paid a percentage of the money awarded to their clients;⁽²⁸⁾ if they lose, they are paid nothing. Depending on the experience of that attorney, he or she has usually evaluated the facts and the law and has determined either that there is a reasonable chance of success or that the size of a potential money award for a substantial injury outweighs the risk of failure. The worst thing you can do after receiving a lawsuit is to underestimate your opponent or to brush off the case as meaningless or worthless. You need to get over your shock at having been sued as soon as you are able to do so. You have to be objective and begin to see the lawsuit from the standpoint of your opponent.

Your first reaction at being sued might be (and probably will be) a sense of anger or frustration, particularly if you had no prior warning that it was coming. But you need to get over this emotional reaction quickly. Don't waste time thinking that "pirates like the plaintiff's lawyer should be forced to walk their own plank," or at least legally prevented from bringing groundless lawsuits like the one that was just served on you. Don't confuse what ought to be with what is. The facts are: (1) that a lawsuit has been brought and (2) it is not likely to go away before you and your insurance company spend a considerable amount of time and money on it.

There are times when your initial reaction to a lawsuit may be entirely justified. A few lawsuits are subject to dismissal at an early stage. Remedies are available by statute to a defendant against a plaintiff and/or his or her attorney who file a clearly frivolous lawsuit. These include, among other things, reimbursement of your legal fees or those of your insurance company.⁽²⁹⁾ And under the common law, if a plaintiff files a lawsuit that clearly fails to state a cause of action under well settled law, the defendant may be entitled to reimbursement of the costs of litigation up to the time of dismissal.⁽³⁰⁾

Dismissal of a lawsuit as frivolous at an early stage of the proceedings, however, is by far the exception rather than the rule. In most cases, judges are reluctant to deny a litigant the right to seek money damages for injuries that are legally the responsibility of someone else - a substantial constitutional right in this state.⁽³¹⁾ A lawsuit must normally "go the distance" and be either settled by agreement of the parties or presented to a jury through the mechanism of a court trial before it will finally be resolved. This does not mean that you cannot or should not work through your trade association or your legislators to change the law to make it more difficult for non-meritorious cases to be brought in the first place. While you are doing so, however, your best interests will demand that you concentrate on defending the case at hand based on the law as it exists when the suit is filed. The most effective way to discourage non-meritorious lawsuits is to win them.

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Early Requirements: Defenses and Insurance

If you are served with a lawsuit, it is imperative that you contact your attorney, if you have one, immediately. There are legal issues that need to be addressed quickly; for example: was the service of the suit papers legally sufficient and are there any affirmative defenses available? Ordinarily such issues must be raised within a very short time or you may lose your right to object or defend based on them. Some affirmative defenses, if raised in a timely fashion, can result in the lawsuit being dismissed. In New Hampshire, a suit for personal injuries must ordinarily be brought within three years of the date of the accident that caused those injuries.⁽³²⁾ But failure to raise this defense quickly can mean that the lawsuit will go forward to trial even if the plaintiff has missed that deadline.

If you have liability insurance coverage for your business, the suit should be reported immediately to the appropriate insurance company following the procedures outlined in the policy. You must notify your insurance company when a lawsuit is filed even if the company already knows about the occurrence. Most liability insurance policies require notification: (1) of an "occurrence" that a reasonable person knows or ought to know could lead to a lawsuit (e.g., an accident resulting in injury to somebody); (2) when a claim or demand is made (e.g., a letter from an injured person's attorney) and (3) when a lawsuit is actually filed. Each such event will give rise to a separate obligation under most insurance policies; and all required notification must be made in order to trigger obligations on the part of the insurance company, first, to hire an attorney to defend you and, second, to indemnify you, if necessary. Failure to make the required notification, if it prejudices the ability of the insurance company to investigate or defend the claim, can leave you and your company without coverage.⁽³³⁾

Steps should be taken immediately after you become aware of the lawsuit (or that a lawsuit is likely) to preserve any documents (records, correspondence, spreadsheets, databases, e-mail, etc.) whether in paper or electronic form, or other tangible things, that may pertain to the issues raised by the plaintiff. If any potentially relevant documents are destroyed, whether deliberately or inadvertently, you or your company could be subject to penalties imposed by the court. To the extent that you have normal procedures for systematic destruction of documents, these should be suspended as to anything that might be relevant to the lawsuit. All employees who may have custody of such should be advised of the need to preserve them.⁽³⁴⁾

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Legal Representation

If you carry liability insurance that covers the allegations made against you in the lawsuit, the attorney who will defend you will most likely be selected by your insurance company, which will ordinarily be responsible for paying the attorney's fees and other defense costs; however, you will become a client of that attorney the same as if you had selected counsel yourself. Therefore, communications between your company's management and the attorney will be deemed confidential.⁽³⁵⁾

Insurance companies usually have lists of approved counsel in well-established law firms who have a great deal of experience in defending civil lawsuits. The standards for getting on such approved lists are pretty high because the people at the companies are also experienced and screen their approved defense firms carefully.

Often, if the insured (you or your company) is a good enough customer, the insurance company will consider your wishes and at least listen to you regarding choice of attorneys. If you want to have a say in choice of counsel, you should start discussions on this point with your carrier's claims representative soon after reporting an occurrence. Find out which law firms are on your insurance company's approved list of counsel. In some cases, particularly if your regular attorney has a recognized expertise in the area involved, your insurance company may be willing to add that attorney to its approved list.

Most insurance companies have developed procedures and criteria for evaluating exposure presented by lawsuits and require their approved defense counsel to follow established guidelines in preparing a plan of action and a litigation budget at an early stage. You should expect to work closely with defense counsel in preparing such a plan or budget.

Before you are even contacted by the attorney selected by the insurance company, his or her firm will have already done a check of their records to make sure that representing your company will not create a conflict of interest with other clients of the firm. New Hampshire attorneys are, as are attorneys in all states, governed by rules of professional conduct that prevent representation of individuals or entities in matters that would jeopardize the interests of another client.⁽³⁶⁾ Before agreeing to take the case, the attorney's firm will check to see, for example, whether the firm has ever represented the plaintiffs and, if so, under what circumstances.

When suit is filed in court and the papers have been served on the defendant or defendants, things will begin to happen quickly. Deadlines are established by law, some of which have short time limits. The recipient of a lawsuit must react quickly, even when the suit is deemed to be utterly groundless, or risk being found in default - with potentially disastrous consequences. Failure to respond officially to a lawsuit by entering a written "appearance" in court by the time established in the suit papers (usually done through an attorney), can result in your company losing the chance to defend the case. In other words, failure to respond in time could mean that the only question left for determination by a judge or jury is how much money will be due to the plaintiff.

Those businesses that apply the principles of project management will recognize the similarities between preparation of a case for trial and, for example, a project to develop and market a new product. As with any major undertaking, all people with a stake in the outcome of the litigation must be invested in the project. A successful defense requires a marshaling of resources, designation of team members, and assignment of responsibilities. Realistic objectives, both interim and final, must be established. Ordinarily a budget is prepared (usually by the attorney in consultation with the claims representative at the insurance company) and a time line is estimated. There is, however, one big difference between litigation and most other projects. That is, there is someone else (the plaintiff) who is running a parallel project with the goal of making sure that your project is unsuccessful.

Soon after suit is filed, you should designate a person within your organization to act as a point of contact with your defense attorney. In most cases where a small business is sued, this person should be the principal owner or the chief executive officer. Often decisions must be made quickly; therefore, the more authority your contact person has, the better.

Whoever is designated as the contact should plan to attend the entire trial if the case is not settled prior to that time. Do not succumb to temptation and designate some underling to sit through trial because you think you are too busy to do it yourself. Your trial representative must do more than just keep the chair warm. Juries, the members of which did not volunteer to be there, do not like it when the people most interested in the outcome of the trial appear to be "blowing them off." They are being forced to decide your case and they typically believe they have a right to expect you to be heavily involved as well.

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Insurance Coverage Issues

Most cases where a civil lawsuit for personal injuries has been brought will be covered by liability insurance. The most common type of liability insurance is, of course, automobile insurance, whether business or personal. In addition to automobile insurance, most businesses carry commercial general liability (CGL) insurance. Members of professions (e.g., doctors, lawyers, engineers, architects, etc.) may be covered by more specialized professional liability (sometimes referred to as "malpractice" or "E&O"⁽³⁷⁾) policies. In addition, nowadays it is becoming increasingly common for businesses to add extra layers of protection through the purchase of so-called "umbrella" policies.

The New Hampshire Legislature has also made provisions for additional protection should a liability carrier become insolvent. When that happens, the New Hampshire Insurance Guaranty Association will take over for the carrier and will "be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not been insolvent."⁽³⁸⁾ While this sounds fairly comprehensive, the process when an insurance carrier becomes insolvent is not seamless. Should your carrier become insolvent, you will need to seek specialized legal advice soon to make sure that you understand all of your rights and obligations.⁽³⁹⁾

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Obligations Under an Insurance Policy

Under most liability insurance policies, the insurance company has two primary obligations: (1) to indemnify its insured if the latter is found to be monetarily responsible for a risk covered by the policy and (2) defend its insured when a lawsuit is brought claiming damages covered by the policy.

The duty to defend is separate from, and broader than, the duty to indemnify⁽⁴⁰⁾ The duty to defend is triggered when the claim is made and exists even when the claims made are ultimately determined to have been groundless. Ordinarily, what determines whether or not there is a duty to defend is how the claims are worded in the writ of summons or complaint.⁽⁴¹⁾

Usually the duty to indemnify is worded broadly. For example, the language in a typical commercial general liability policy states that the insurance company "will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies."⁽⁴²⁾ This general duty is limited by a list of specific exclusions. For example, the insurance coverage will not apply to injuries or damages that are "expected or intended from the standpoint of the insured."⁽⁴³⁾ There are many specific exclusions, which vary with the type of coverage purchased, and a careful reading of the policy, including all endorsements,⁽⁴⁴⁾ will usually be necessary.

If a liability insurance carrier questions whether it should provide coverage for a lawsuit, it may nonetheless provide a defense, but under a so-called "reservation of rights,"⁽⁴⁵⁾ while seeking a judicial determination of its rights and obligations under the policy in a separate action.⁽⁴⁶⁾

Having retained almost complete control over the conduct of the litigation, the insurance company also has an obligation to protect its insured's assets from judgments that exceed the amount of coverage available. If an opportunity to settle with the plaintiff within the policy limits becomes available, the company must have due regard for its insured's interests and settle the case, if it would be negligent not to.⁽⁴⁷⁾ Normally, the lower the amount of coverage for a given claim, the greater is the insurance company's duty of care, since the insured's exposure is greater under those circumstances.⁽⁴⁸⁾

As an insured, you or your business will also have duties under the insurance policy. Throughout the course of the litigation, you will have a duty to cooperate with and assist the insurance company and defense counsel in preparation for trial.⁽⁴⁹⁾ You must be careful not to prejudice the ability of the insurance company to defend the case on your behalf.⁽⁵⁰⁾ Don't speak about the case with anyone other than people associated with the insurance company or the attorney assigned to your defense. The reason for this is that conversations with people other than these may not be protected by the attorney-client privilege. Such people may be subpoenaed by your opposition and compelled to disclose the content of those conversations.

The relationship among you or your company, the insurance company, and the attorney assigned by the insurance company to defend you, has come to be known as the "tripartite relationship." Under the law of New Hampshire, the attorney assigned to your defense represents the interests of both the insurance company and the insured.⁽⁵¹⁾ The tripartite relationship has evolved over time and has worked very well, largely because the primary goals of the relationship - the successful defense of lawsuits and the swift resolution of claims - are shared by both the insurer and the insured. While there may be issues of conflict between an insured and the insurance company, the attorney assigned to defend the lawsuit cannot become involved in such disputes or conflicts. For example, if there is a question whether coverage will ultimately apply to a lawsuit, the defense attorney cannot become involved in those questions at all. As stated earlier, if the coverage dispute leads to another lawsuit both the insurance company and the insured must obtain separate counsel to represent them in that dispute.

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Investigation Phase

The insurance company probably started its investigation of the case soon after having been notified of an occurrence. Most companies have well established procedures in place to investigate and (possibly) adjust and settle claims before suit is brought. If a case is obviously one where the insured is likely to be held liable (e.g., one of your employees was not paying attention and rear-ended another motorist), the insurance company will try to keep expenses down and to settle the case at an early stage before having to retain a defense attorney.

This is one reason why all policies require report of an occurrence at an early date. Investigation is best begun while facts are fresh in witnesses' minds, and the company needs to have a clear picture of what happened in order to make an early determination whether the case is one that should be defended or should be settled.

Normally, the insurance company will assign the case to a claims representative or adjuster who will establish contact with the plaintiff or the plaintiff's attorney to gather information and to establish a working relationship. Sometimes, despite the insurance company's efforts to resolve the case before suit, the plaintiff will bring suit with few, if any, preliminary negotiations. There are a number of reasons to do this. In the first place, all judgments for money damages carry interest that does not begin to accrue until the lawsuit is filed.⁽⁵²⁾ Filing suit may also put pressure on the insurance company to pay more than it otherwise would if it is faced with the prospect of paying for a lot of pretrial and trial expenses, including defense attorney's fees. Another reason to bring suit at an early stage is that it gives the plaintiff and his or her attorney access to discovery materials that might otherwise not be readily available. And, of course, the plaintiff's attorney might fear that the statute of limitations (as previously stated, three years) is about to run.

Sometimes your first notice that a claim is being made is the lawsuit itself. For example, in a products liability case where one of your products allegedly caused injury to a consumer, you may not be aware that there was even an accident or injury until suit is filed. Sometimes a long period of time has passed between the time of the injury and the date suit is brought. If you had no prior notice and your insurance company had no prior notice, the plaintiff will have had ample opportunity to investigate the claim and to prepare for the suit. You, your attorneys, and the insurance company will be playing "catch up."

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Trial Preparation (Discovery Phase)

After suit has been brought, you and your company can expect to become involved very quickly in trial preparation. Your defense attorney will be looking for input from you and your people regarding the events surrounding the accident or occurrence. Your attorney will want names of witnesses as well as copies of documents, photos, sketches, maps, and other things relating to the lawsuit, names and addresses and phone numbers of people who have given statements, and the names of people to whom such statements were given.

The attorney's job will be to review and analyze the material developed during the investigation phase. If for some reason there was little, if any, investigation (for example, when the lawsuit is the first notice of the claim), the attorney must direct and participate in necessary investigation. The defense team must begin gathering relevant records and other evidence on liability, such as police reports and other government reports, including any investigations done by federal, state or local officials. If personal injuries are claimed, the attorney will begin to gather medical records, employment records, and any other evidence of expenses allegedly generated as a result of the injuries. One issue that often arises in claims for personal injuries is whether the injuries alleged by the plaintiff are entirely due to the claim of liability. For this reason, the defense team will probably need to obtain a complete medical history of the plaintiff prior to the accident or injury complained of.

If the case is filed in a state court, the suit papers will indicate that the defendant must appear in court by the return date.⁽⁵³⁾ This just means that a document must be filed by your attorney indicating that he or she represents your company. This triggers an obligation on the part of the plaintiff, the court, and any other parties involved in the case to provide notice to your attorney of anything going on in court (motions, hearings, depositions, etc.). It does not mean that you or any of your employees must be physically present in court on the day named.

Typically, your attorney will file a "special" appearance. By entering a special appearance, you are given thirty days within which to raise any special matters.⁽⁵⁴⁾ If no special matters are pleaded within thirty days, the appearance automatically turns into a "general" appearance,⁽⁵⁵⁾ which acts as a denial of all factual allegations made in the writ of summons.⁽⁵⁶⁾

If the case is in federal court, the defendant must respond to each individual allegation made by the plaintiff and must admit or deny each one, or indicate that the defendant has insufficient knowledge to either admit or deny the allegation.⁽⁵⁷⁾

Most state civil actions are actions at law for money damages.⁽⁵⁸⁾ The rules do not require that each factual allegation be addressed in a response. However, any affirmative defenses⁽⁵⁹⁾ must be set forth in a formal written response, either by way of a special plea or a brief statement of defense.⁽⁶⁰⁾ For example, if the defense team believes that the plaintiff shares in the blame for the accident, the affirmative defense of "comparative fault" should be raised in response to a writ of summons.

Once the initial pleadings and responses or motions have been filed, the court will schedule a preliminary structuring conference. The purpose of this structuring conference (which need not be attended by the parties themselves, but only the attorneys), will be to set an orderly schedule of interim deadlines in order to facilitate moving the case toward settlement or trial.⁽⁶¹⁾

Typically, the discovery phase of a lawsuit will last for a year or even longer before trial, depending on the complexity of the issues involved and the amount of discovery that will have to be conducted.

Many who have not been exposed to the litigation process are surprised by the adversarial way in which it is conducted. The theory behind this approach is that out of the clash of opposing partisan viewpoints, neutral objective viewers (i.e., the jury), will be able to come close to ascertaining the truth and reaching the right decision. Despite the adversarial nature of the process, however, experienced New Hampshire attorneys try to avoid becoming involved in a "cat fight" and normally work hard to eliminate unnecessary conflict. They recognize that it is usually in the best interest of their clients - whether the insurance company, the insured defendant or the plaintiff - to pick their battles carefully and to maintain a professional approach when dealing with the other side. More often than not, it is counterproductive to be a so-called "street fighter." Nowadays, judges commonly begin monitoring or supervising the progress of the litigation soon after it commences. They expect attorneys to be civil with each other and to cooperate in the cause of expeditiously moving the litigation forward, so long as their clients' interests are not adversely affected.⁽⁶²⁾

There are basically two goals in the discovery phase: (1) to thoroughly check out and investigate all of the facts that are likely to be presented at trial; and (2) to evaluate the case for settlement potential. Discovery normally consists of both written discovery and depositions.

Written discovery can take the form of interrogatories or requests for production of documents. Each side is entitled to serve upon the other written questions (interrogatories) that must be answered within thirty days, unless an extension of time is agreed upon or ordered by the court for good cause.⁽⁶³⁾ Requests for production of documents are just exactly what they sound like: written requests served upon the other party that copies of documents or other evidence be either made available for inspection or copied and delivered to the requesting party.⁽⁶⁴⁾

If your attorney sends you interrogatories or other requests for discovery propounded by the other side, you should immediately look them over carefully and determine who in your organization will need to assist in responding. The rules specify deadlines for responding, so to the extent that you or others will need to gather documents together, check records, etc., you should start doing so right away. It is important to understand that if responses are not filed on time, serious consequences may result, including the possibility of a default judgment by the court. If you believe you will need an extension of time to respond, you should call your attorney immediately so he or she can start working to obtain the extra time.

Depositions are discovery tools permitted under the court rules where parties to the action, as well as non-party witnesses, orally answer questions from opposing counsel. Normally, they take place at an attorney's office. Typically, each party decides what witnesses it wishes to depose. All attorneys involved in the case are notified of the time and place of depositions (usually set by agreement) and are allowed to question each witness who is deposed. Depositions are helpful in ascertaining the strength and credibility of parties or other witnesses and are widely used for that purpose. Each witness is sworn in just as he or she would be if testifying in court and the questions and answers are simultaneously recorded by a certified court reporter. The entire session is later transcribed by the court reporter and copies are provided to the attorneys. Under some circumstances, the transcript of the deposition may be used at trial in lieu of the witness actually appearing. In some cases (typically with treating physicians, who tend to charge heavily to testify live in court), the deposition will be recorded on videotape in addition to being transcribed by a court reporter, and the videotape will later be shown to the jury at trial.⁽⁶⁵⁾

Written requests for admission are also used during the discovery phase. Parties who believe that certain facts, including the authenticity of documents, are not in dispute may file a request that the other side formally stipulate or agree to their accuracy. The opposing party will have 30 days to respond. If, after that time, the opposing party has not responded, the facts will be deemed to have been admitted, and no evidence will have to be presented on those points at trial.⁽⁶⁶⁾

Sometimes during the discovery phase, facts come to light that indicate that there are no material factual disputes requiring a trial and that the outcome of the litigation is subject only to a legal determination by the judge. In such cases, one of the attorneys may file what is known as a motion for summary judgment, indicating that his or her client is entitled to judgment as a matter of law.⁽⁶⁷⁾ Such motions do not often succeed, as judges are reluctant to deny parties their "day in court," but it is the obligation of the attorneys to be on the lookout for such situations and to promptly move for summary judgment when the situation warrants. For example, if a lawsuit is based upon a claim that one of your employees acted negligently and discovery conclusively determines that the employee was not acting within the scope of his or her employment at the time, the case may be summarily dismissed by the judge on that basis without the necessity of taking it all the way through trial.

Other motions, while not necessarily dispositive of all issues, may nonetheless tilt things in one party's favor. Motions in limine for example, are requests that the court determine in advance of trial whether to admit certain types of evidence. Where it becomes obvious that a witness, if allowed to testify, would present inadmissible evidence, the appropriate way to safeguard against this happening is to file a motion in limine before trial and obtain a protective ruling from the judge. Sometimes this has the effect of cutting the legs out from under your opponent so that he or she becomes more reasonable in settlement negotiations.

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Settlement

Most lawsuits settle before trial. Insurance companies know this and expect to settle most of the cases that come before them. Usually, they have decided which cases should settle well in advance of trial. The longer a case proceeds, the more money it costs the insurance company. So it is therefore in the company's best interests to determine as quickly as possible whether it wishes to settle a particular case or to defend it through trial. Once a company has determined to settle, it makes economic sense to do so as quickly as possible. For this reason, in most liability insurance policies the insurance company retains exclusive control over settlement decisions.

Even in cases where the insurer, the insured and the defense attorney all feel there is a strong likelihood of a defendant's verdict, the insurer may determine that settlement is advisable. If, for example, the plaintiff's attorney knows that he or she has a probable loser, and shows a willingness to negotiate on that basis, it may make economic sense to settle and avoid the cost - and the risk - of trial. Juries are unpredictable, and every experienced trial attorney knows that there are no cases that are so good that they cannot be lost under the right (or wrong) circumstances.

While it is true that in some cases the insured's permission is necessary to settle, in reality, such permission is almost always granted. The reason for this is that policies that require the permission of the insured to settle normally also contain a provision known as the "hammer clause." Under such a provision, if the insurance company has a chance to enter into a settlement and the insured refuses to give permission, the insured will be responsible for all defense costs, including attorney's fees, from that point on and also will be responsible for any adverse judgment in excess of the amount for which the case could have been settled.⁽⁶⁸⁾ I have yet to see a case where an insured defendant has continued to withhold its permission to settle under these circumstances.

In New Hampshire, one of the interim events that will be scheduled by the court at the preliminary structuring conference is some form of alternative dispute resolution.⁽⁶⁹⁾ Typically, part way through the discovery schedule, a mediation session will be scheduled, usually at a time when most of the discovery will have been completed so the parties should be aware of the strengths and weaknesses of their respective positions. If the parties do not wish to obtain a private mediator, the court has a number of volunteer mediators available who will meet with the parties and their attorneys in an attempt to resolve the dispute short of going to trial.⁽⁷⁰⁾ In a mediation, the parties are under no obligation to enter into a settlement agreement; however, it is often advisable to do so, particularly if discovery has revealed that there would be a substantial risk in bringing the matter before a jury.

Besides mediation, another form of alternative dispute resolution is arbitration. Arbitration is a process where parties agree to take the matter out of the court system and instead have the case decided by an arbitrator.⁽⁷¹⁾ An arbitrator is usually an experienced attorney with no stake in the outcome of the litigation who is chosen by both parties. The parties present an expedited version of the evidence to the arbitrator(s), usually in a more informal setting than a courtroom. The arbitrator(s) then decides the case as if he/she/they were judge and jury. Arbitrations have the advantage of being more streamlined than jury trials and, thus, are less expensive. The parties often structure their agreement to arbitrate by setting upper and lower limits to an award; however, by agreeing to arbitrate at all they give up their right to a trial by jury. Many defendants who have gone through the arbitration process in personal injury litigation feel arbitrators tend to be more generous to plaintiffs than juries faced with similar facts. Plaintiffs' attorneys, on the other hand, often feel that arbitrators are less likely to award substantial amounts than are juries. In truth, all cases must be approached individually and each must be analyzed on its own merits when examining the potential for resolution by arbitration.

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Trial

If the case is not dismissed, settled or referred to binding arbitration, it will eventually come to trial. When that happens, the first item on the agenda will be selection of the jury. Potential jurors are chosen periodically in Superior Court from a list of licensed drivers and lists of registered voters.⁽⁷²⁾ The panel of potential jurors is called the venire. Each potential juror, when assigned to this duty, is required to respond to a questionnaire from the clerk of court, giving his or her age, occupation, marital status, number of children, educational background, and other similar information. Your attorneys will have access to the questionnaires and may discuss the list of potential jurors with you prior to trial.

Before jury selection begins, the judge will give the venire a brief summary of the facts of the case and will ask a series of questions designed to determine whether there are any potential jurors who, because of past or present relationships with any of the parties or the attorneys, or for other reasons, might have difficulty being fair and objective. Until recently, the judge was the only one who would ask such questions; however, in state court the lawyers for the parties now are able to participate directly in this process, known as voir dire.⁽⁷³⁾

The jurors are then chosen at random. Their names are placed into a hopper and are drawn by the court clerk one at a time until a sufficient number has been selected. When a prospective juror is challenged by either side, another is chosen to take his or her place. This process proceeds until a full jury of twelve has been seated.⁽⁷⁴⁾ Alternate jurors are also selected to take the place of any of any jurors who become unable to continue because of illness, personal emergency, and the like.

After the jury has been selected and seated, the trial begins. In some cases, the jury (and sometimes the judge) is taken by bus to the scene of the accident for what is called a "view." During the view, the lawyers for all parties are also present and ask members of the jury to observe certain things at the location that they feel have a bearing on the case. The lawyers may make no argument or statements of fact at the scene of the view, and the jurors are not allowed to ask any questions of the lawyers. Prior to going on the view, the lawyers are allowed to make brief statements in court to the jury indicating what they would like them to observe during the view.

After returning from the view, the lawyers give opening statements. These are brief speeches that provide the jury with a "preview of coming attractions." Typically, the opening statement is used to give the "big picture" to the jury. Lawyers are supposed to avoid making arguments and instead restrict their statements to what they expect the evidence to show.

Evidence in trial consists of four things: (1) what the jury sees on the view; (2) the admitted facts (commonly called "stipulations," which can be presented either by agreement or may be the result of requests for admission); (3) physical evidence consisting of documents, maps, charts, diagrams, photographs, models, pieces of machinery, articles of clothing, etc.; and (4) the testimony of witnesses, which may be live or by deposition, either written or video.

The plaintiff always goes first, followed by each of the defendants in turn. In multiple-party cases, the order of presentation is usually agreed upon by the parties; however, if they cannot agree on the order of presentation, the judge will decide. In many cases, the plaintiff will call not only witnesses supportive of the plaintiff, but also many of the employees of the defendants who are expected to testify as well. This means that at the close of the plaintiff's case, the trial is often almost over, with very little left to be presented by the defendants.

The presentation of evidence is governed by formal rules of evidence. With some minor differences, these are much the same in both federal and state court. The purpose of the rules of evidence is to insure that the information going to the jury, most of whom are lay people unused to the legal process, is screened to minimize the chance that they may be swayed by something other than facts that have a bearing on the matters in issue.

The evidence that may be presented is controlled by the use of objections. If an attorney asks a question, the answer to which may not be allowed by the rules, the opponent or opposing attorney will typically rise to his or her feet and object, giving a short descriptive phrase, e.g., "hearsay" or "irrelevant." Long-winded explanations are not allowed, as they tend to provide information to the jury that goes beyond the rules of evidence. Sometimes, if the judge requires more information to rule on an objection, the attorneys will ask to approach the bench and discuss the matter privately with the judge. If a lengthy discussion is necessary, the judge may even excuse the jury from the courtroom while the discussion takes place.

Examples of evidence whose introduction would be improper include some forms of character evidence or "prior bad acts" of the witness,⁽⁷⁵⁾ testimony concerning collateral sources of funds (e.g., the fact that the plaintiff's medical bills were covered by health insurance),⁽⁷⁶⁾ evidence that the defendant corrected a dangerous situation after an accident happened,⁽⁷⁷⁾ and the catch all: any matter the relevance of which would be outweighed by the prejudicial effect that it could have on the jury.⁽⁷⁸⁾

Witnesses are called to testify by the attorney for the party whose case is being presented. When that attorney questions the witness, it is called "direct examination," and is normally limited to questions that are not leading; i.e., that do not suggest the answer. An example of a leading question would be, "[i]sn't it true that you observed my client stopping for the red light?" A non-leading (proper) question would be: "[t]ell us what you observed when you approached the intersection." There is an exception to the "no leading questions on direct examination" rule and that is when a so-called "hostile" witness is called by the attorney. A hostile witness is one whose background or position may cause him or her to be opposed to the attorney's client. If one of your employees, for example, is called to the witness stand by the plaintiff's attorney, he or she will almost always be deemed to be "hostile" and the plaintiff's attorney will be allowed to ask leading questions.

At the completion of the direct examination, the defense attorney (or attorneys) will be given the chance to ask questions on cross-examination. A cross-examiner will normally be allowed to ask leading questions.

The attorney presenting the case (always the plaintiff first) may call any witness he or she desires. Sometimes the plaintiff's attorney may call the opposing party or the opposing party's representative as the first witness at trial. This is often done to catch the witness off guard, hoping that he or she is not yet tuned in to the case.

Normally, witnesses who are not so-called "experts" must testify only to facts that they observed, and may not give their opinions, except when the opinions are, in the view of the judge, both rationally based on the witnesses' perception and helpful to a clear understanding of the testimony or the determination of a fact in issue.⁽⁷⁹⁾ Expert witnesses (i.e., those who are qualified by education, training, or experience) may give opinions based upon facts testified to by others or learned elsewhere.⁽⁸⁰⁾ An example might be a treating physician who would be allowed to give an opinion concerning the causal relationship of certain injuries to an accident, based upon facts testified to by others as to what happened at the scene of the accident.

One issue that should be kept in mind by all witnesses testifying on behalf of your company is that the presence or absence of liability insurance is almost always completely irrelevant to the case. It is important that all witnesses are briefed on this in advance of trial, because if someone were to inadvertently blurt it out while on the stand, it could lead the jury to conclude that awarding money to the plaintiff would not really hurt your company.

After all of the evidence has been presented, the attorneys for the parties will give closing arguments. Unlike opening statements, attorneys may use what they consider to be persuasive arguments concerning what the jury ought to make of the testimony that they have just heard. The order of closing arguments is reversed from the order of presentation used throughout the trial, and the plaintiff's attorney always gives the last closing argument.

At the completion of closing arguments, the judge will instruct the jury on the law that they are to apply to the case. The jury is told that they are the sole judges of the facts, but that they must apply to those facts the law that the judge gives to them. The judge will explain that the plaintiff has the burden of proof on most issues. He or she will define what is meant by "negligence," and that if the defense of comparative fault, for example, is raised, the defendant has the burden of proof on that issue. The jury will be told that if they decide the defendant is responsible for the plaintiff's injuries, they are to award full, fair, and adequate compensation for those injuries, but the purpose of the civil process is not to punish defendants or to make examples of them for others.

After the charge to the jury, the members will retire to a separate room and deliberate on the case. All documents and other items that were marked into evidence will go into the jury room with them and be available for their review during deliberations. There will normally be some exhibits that, for one reason or another, have been marked only "for identification." These will remain part of the record in case of an appeal; however, the jury will not be able to review them during deliberations. In New Hampshire state cases, when the jury is ready to render its verdict, they do not all file back into the courtroom, as they do in criminal cases, but instead complete a form signed by the foreman, sealed in an envelope, and given to the bailiff, who then gives it to the judge. The judge will open the envelope in the presence of the attorneys, and read it to them on the record. The clerk of court will then mail an official notice of the verdict to the attorneys.

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Appeal

To avoid entry of judgment under the court rules, the losing side must file an appeal within thirty days of the date of the clerk's notice, unless an appropriate post-trial motion⁽⁸¹⁾ is filed within ten days.⁽⁸²⁾ If a timely post-trial motion is filed, and denied, an appeal must be filed within thirty days of the clerk's notice of decision on that motion.⁽⁸³⁾ If the action is in state court, the appeal will be to the New Hampshire Supreme Court. If the action is in federal court, the appeal will be to the United States Court of Appeals for the First Circuit in Boston.

If a decision is appealed, the appellate court will set a schedule for filing briefs and, in most cases, oral argument. The court will ordinarily confine itself to reviewing rulings of law made by the judge and will not overturn any findings of fact made by the jury. If the higher court determines that the trial judge was in error, its decision can range from simple reversal, with no further action necessary by the parties, to a new trial on some or all of the issues, depending on the nature of the error. If the higher court finds no error, it will affirm the trial verdict.

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Conclusion

I will end by stressing that no two cases are alike, and that no article such as this can make the reader an expert on civil litigation. I hope, however, that those who read it will gain a basic understanding of the way the system works and will be better able to participate productively, should the need arise.

Notes

1. Adopted in New Hampshire as RSA Chapter 382-A.

2. Loss of consortium is the term used to describe a cause of action by the spouse of an injured person for damages resulting from interference with affection, household services, companionship, and the like. See RSA 507:8-a .

3. See Elwin L. Page, Judicial Beginnings in New Hampshire (N.H. Historical Society 1959).

4. "[A] tort is a civil wrong, other than a breach of contract, for which the court will provide a remedy in the form of damages." Bohan v. Ritzo, 141 N.H. 210, 215, 679 A.2d 597, 601 (1996), citing Black's Law Dictionary 1422, 1489 (6th ed. 1990).

5. The most prevalent type of case where a showing of fault is not necessary is the so-called "products liability" action. Sellers of defective products that cause injury may be held strictly liable, that is, without proof of fault. Buttrick v. Lessard, 110 N.H. 36, 38-39, 260 A.2d 111, 113 (1969).

6. Hon. Walter L. Murphy & Daniel C. Pope, New Hampshire Civil Jury Instructions, § 6.1 (4^th ed. 2004).

7. RSA Chapter 265 .

8. RSA 265:10 . Not every violation of a statute or ordinance will result in civil liability. Violation of a statute can only be the basis for civil liability if the harm that results is of a sort that the statute was enacted to guard against. Bagley v. Controlled Environment Corp., 127 N.H. 556, 561, 503 A. 2d 823, 826-827 (1986). On the other hand, adherence to a rule or statute will not always protect a business from civil liability. When Congress, for example, enacts legislation that results in detailed regulation of certain types of industries, there is a strong presumption by the courts that state causes of action, including common law tort actions, are not preempted by such regulations "'unless that was the clear and manifest purpose of Congress.'" Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S. Ct. 2240, 2250, 135 L. Ed. 2d 700, 715 (1996); quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct. 1146, 1152, 91 L. Ed. 1447, 1459 (1947).

9. Allen v. Dover Co-Recreational Softball League, 148 N.H. 407, 417, 807 A. 2d 1274, 1283-1284 (2002).

10. Palsgraf v. The Long Island R.R. Co., 248 N.Y. 339, 341-342, 162 N.E. 99 (1928).

11. Hon. Walter L. Murphy & Daniel C. Pope, New Hampshire Civil Jury Instructions, § 6.1 (4^th ed. 2004).

12. Many students of this area of the law would apply a cost-benefit analysis to determine the reasonableness of activities that may cause injury. The following quotation from a decision written by Judge Learned Hand is generally thought to set the gold standard in this regard. The case involved a barge that had broken loose from its moorings in New York Harbor in 1944, causing extensive damage to other shipping in the area.

Since there are occasions when every vessel will break from her moorings, and since, if she does, she becomes a menace to those about her; the owner's duty, as in other similar situations, to provide against resulting injuries is a function of three variables: (1) The probability that she will break away; (2) the gravity of the resulting injury, if she does; (3) the burden of adequate precautions. Possibly it serves to bring this notion into relief to state it in algebraic terms: if the probability be called P; the injury, L; and the burden, B; liability depends upon whether B is less than L multiplied by P: i.e., whether B [is] less than PL.

U.S. v. Carroll Towing Co., Inc., 159 F.2d 169, 173 (2^nd Cir. 1947). See also, Richard A. Posner, A Theory of Negligence, 1 J. Leg. Stud. 29 (1972 ).

13. See William M. Landes & Richard A. Posner, The Economic Structure of Tort Law 6 (Harvard University Press, 1987). Of course, if the cost of such risky activities becomes so high that your customers will not pay it, the activities will either become less risky or will eventually cease.

14. On June 8, 2004, the United States Chamber of Commerce Institute for Legal Reform completed a study that analyzed the cost of tort litigation to small businesses. The study was updated in May 2007. The results are somewhat startling.

Judyth W. Pendell, "Tort Liability Costs for Small Business"

The study probably even understated the impact of tort litigation on small business, in that the costs it measured did not include many intangibles - e.g., time spent worrying about a particular lawsuit, responding to discovery requests by plaintiff's attorneys, or educating your own attorney, etc. Obviously, the more you understand about the process, the more you should be able to minimize such intangible costs.

15. RSA 509:3 ; RSA 510:2 .

16. RSA 510:14 .

17. RSA 293-A:5.04 .

18. 28 U.S.C. § 1331 .

19. Only if all defendants are citizens of a state different from the plaintiffs and the amount in controversy is greater than $75,000. The basis for federal jurisdiction under such circumstances is known as "diversity of citizenship." 28 U.S.C. § 1332 

20. Usually the United States District Court for the District of New Hampshire, which is located in the Warren B. Rudman United States Courthouse at the corner of Pleasant and Spring Streets in Concord.

21. Fed. R. Civ. P. 4(c)(2) .

22. Fed. R. Civ. P. 4(d) .

23. 28 U.S.C. § 1441 .

24. 28 U.S.C. § 1441 (b) .

25. RSA 510:4 .

26. RSA 293-A:15.10 .

27. Sometimes referred to as the "passing the blush test."

28. Usually a third.

29. See RSA 507:15 .

30. See Business Publications, Inc. v. Stephen, 140 N.H. 145, 149, 666 A. 2d 932, 934 (1995).

31. Carson v. Maurer, 120 N.H. 925, 931-932, 424 A.2d 825, 830 (1980).

32. RSA 508:4 .

33. See Cutting v. Town of Allenstown, 936 F.2d 18 (1^st Cir. 1991); Town of Allenstown v. National Cas. Co., 36 F. 3d 229 (1^st Cir. 1994).

34. The advent of the computer age has added a new dimension to civil lawsuits, not only because of the extremely high cost of preserving and retrieving relevant electronic information, but because of the exposure to sanctions from the court for failing to take this obligation seriously. In a recent employment discrimination case in New York, for example, the presiding judge instructed the jury that it could infer from the defendant company's failure to preserve arguably relevant e-mails, that their disclosure would have been bad for the company. The jury whacked the company with a verdict of almost $30,000,000. See Zubulake v. UBS Warburg, LLC, 2004 U.S. Dist. LEXIS 13574, 61-62 (2004). This area of the law is in its infancy, but many courts have followed the trail blazed in Zubulake.

35. N.H. R. Evid. 502 .

36. N.H. R. Prof. Conduct 1.7 , et seq.

37. For "Errors & Omissions."

38. RSA 404-B:8(b) .

39. See, e.g., Benson v. N.H. Ins. Guar. Assn., 151 N.H. 590, 864 A. 2d 359 (2004).

40. Ross v. The Home Ins. Co., 146 N.H. 468, 473, 773 A. 2d 654, 658 (2001).

41. Broom v. Cont'l. Cas. Co., 152 N.H. 749, 754, 887 A.2d 1128, 1132-1133 (2005).

42. Standard CGL Policy.

43. Id.

44. Endorsements are provisions added to a policy that may supercede provisions printed in the main body of the contract.

45. Usually a letter outlining why it thinks that some or all of the claims being made may not be covered by the terms of the policy. It typically reserves the right to refuse to indemnify its insured if the facts, as ultimately decided by the judge or jury, show that the claims were not covered.

46. Usually a declaratory judgment action pursuant to RSA 491:22 . In Federal Court, such actions may also be brought pursuant to 28 U.S.C. § 2201. Such separate declaratory judgment actions require different attorneys for both parties; the defense counsel retained by the carrier would not be able to represent either insurer or insured in a coverage dispute because of their conflicting interests. The insured may also bring a petition for declaratory judgment against the carrier, as may the plaintiff in the underlying lawsuit.

47. Dumas v. State Farm Ins. Co., 111 N.H. 43, 274 A. 2d 781 (1971).

48. Id., 111 N.H. at 48, 274 A. 2d at 784.

49. Standard CGL policy.

50. For example, you should not admit liability even if you think that an accident clearly was your fault or the fault of one of your employees. This issue often arises when criminal charges are brought, including citations for traffic offenses. If you are charged with a traffic offense in connection with an accident, it is important that you not plead guilty. If you do not wish to fight the charge, the better course would be to plead nolo contendere (Latin for "I do not wish to contend"). When you plead nolo, you are not admitting your guilt or the truth of the charges (RSA 605:6); however, if you plead guilty that fact can be used in a later civil case as an admission of liability.

51. Dumas, 111 N.H at 49, 274 A. 2d at 784.

52. RSA 524:1-a . The statutory rate of interest is set annually and is based on the 26-week U.S. Treasury bill rate, plus two percentage points. RSA 336:1 .

53. The first Tuesday of each month is designated as a "return day" for civil cases in New Hampshire state courts.

54. E.g., a claim that service of process was not legally adequate.

55. N.H. Super. Ct. R. 14.

56. Storch Engineers v. D & K Land Developers, 134 N.H. 414, 416-417, 593 A. 2d 245, 247 (1991).

57. Fed. R. Civ. P. 8(b) . In state court, if the lawsuit is commenced by a Petition or a Bill in Equity, the defendants must respond to each allegation in a similar fashion. N.H. Super. Ct. R. 133.

58. In state cases, however, the plaintiff is prohibited from requesting a specific amount of money in the writ of summons. See RSA 508:4-c .

59. Matters on which the defendant bears the burden of proof and that may have the effect of either negating the defendant's liability or of limiting the amount of damages recovered by the plaintiff.

60. N.H. Super. Ct. R. 28.

61. N.H. Super. Ct. R. 62 ; Fed. R. Civ. P. 26(f).

62. See, e.g., N.H.B.A. Litigation Guidelines.

63. N.H. Super. Ct. R. 36; Fed. R. Civ. P. 33.

64. N.H. Super. Ct. R. 35; Fed. R. Civ. P. 34.

65. See N.H. Super. Ct. R. 37-44; Fed. R. Civ. P. 30-32.

66. N.H. Super. Ct. R. 54; Fed. R. Civ. P. 36.

67. RSA 491:8-a ; Fed. R. Civ. P. 56 .

68. "If, however, the named insured shall refuse to consent to any settlement recommended by the Company, and shall continue litigation at the trial level or at the appellate level in connection with such claim, then the company's liability for that claim shall not exceed the amount for which the claim would have been settled plus the cost and expenses incurred with the Company's consent up to the date of such refusal to settle. " Security Ins. Co. of Hartford v. Schipporeit, Inc., 69 F.3d 1377, 1383 (7^th Cir. 1995).

69. N.H. Super. Ct. R. 170.

70. For a current list of Volunteer Superior Court Mediators, see the New Hampshire Judiciary's web site: <http://www.courts.state.nh.us/adrp/r170/r170mast.pdf>

71. Or a panel of arbitrators (usually three).

72. RSA 500-A:6 ; for federal court, see 28 U.S.C. § 1861, et seq.

73. RSA 500-A:12-a .

74. Six in federal civil cases. Fed. R. Civ. P. 48 .

75. N.H. R. Evid. 404. For instance, conviction of a crime that is either too remote in time or which does not reflect on the witness' honesty (driving while under the influence, e.g.) would normally not be admissible.

76. Cyr v. J. I. Case Co., 139 N.H. 193, 198, 652 A. 2d 685, 689 (1994).

77. N.H. R. Evid. 407.

78. N.H. R. Evid. 403.

79. N.H. R. Evid. 701.

80. N.H. R. Evid. 702.

81. E.g., a motion for judgment notwithstanding the verdict, or for a new trial.

82. N.H. Super Ct. R. 59-A; Fed. R. Civ. P. 59 .

83. N.H. Sup. Ct. R. 7; Fed. R. App. P. 4.