When you receive a lawsuit notice, you might worry about the financial and reputational impact. Court records are usually public, meaning competitors, investors and customers can see them. Are there ways in the legal system to keep sensitive business disputes private?
The presumption of public access
The American legal system typically supports open access to court proceedings. Court records are usually considered public, allowing the public to observe the judicial system. This openness promotes fairness and accountability.
Reasons to seal a business lawsuit
Sealing a lawsuit is the exception, not the rule. Here are some reasons a court might agree to seal a business lawsuit:
- Trade secrets: Protecting valuable trade secrets from competitors is a common reason. Revealing these secrets in court could harm your business, and courts understand this concern.
- Confidential business information: Businesses have private data about their operations, finances and customers. Disclosing this information could put the business at risk.
- Privacy of individuals: A lawsuit might involve sensitive personal information about individuals. Courts balance the public’s right to know with the need to protect personal privacy.
Businesses must present enough evidence to the court to prove that their need for confidentiality outweighs the public interest in open records. This evidence may come from testimonies or documents. The judge then decides.
Businesses should note that complete case sealing rarely occurs. Courts typically prefer limited redactions or sealing only particular documents with truly sensitive content.
Taking action to protect your business
Keeping business information private during lawsuits requires good planning and legal knowledge. A skilled business lawyer can help choose the right privacy options for your case. They can prepare necessary documents, work out protective agreements and recommend ways to better protect your private information.