The Lasting Effect of Failing to Respond to a Lawsuit 

A lawsuit can be devastating for small and midsize businesses. Between limited resources and the demands of daily operations, some business owners delay their response, or worse, ignore the lawsuit entirely. But choosing not to respond does not avoid the problem—it escalates it. 

Whether the complaint involves a breach of contract, unpaid debts, consumer protection claims, or regulatory violations, failing to respond can trigger serious, long-lasting consequences that impact your finances, operations, and long-term viability. 

How Lawsuits Begin—and Why Prompt Action Is Critical 

Civil lawsuits begin when a plaintiff files a complaint in court and formally serves it on the defendant. The complaint outlines the alleged wrongdoing and the relief being sought—typically monetary damages or injunctive relief. 

The clock starts as soon as the claim is served. In most Florida state court cases, a business has 20 days to respond; in federal court, the deadline is generally 21 days. If no response is filed within that time frame, the plaintiff may request a default judgment. At that point, the court may grant the relief requested in the complaint without ever hearing your side of the story. 

Responding does not mean admitting wrongdoing. It preserves your right to defend yourself and forces the plaintiff to prove their claims. Ignoring a lawsuit does not make it go away. Instead, it results in a default judgment, allowing the court to assume the allegations are true and award the full amount requested. 

What a Default Judgment Can Mean for Your Business 

A default judgment is far more than a procedural setback. It carries significant legal and financial consequences. Monetary damages—whether compensatory, statutory, or punitive—may be awarded in full. The court may also issue injunctive relief, including cease-and-desist orders that can halt core aspects of your business operations. 

In addition, default judgments open the door to asset seizures and liens. Bank accounts may be garnished, and property may be levied to satisfy the judgment.  

Once a default is entered, the defendant loses control over the litigation. The court, guided solely by the plaintiff’s version of events, determines the outcome. 

The Ripple Effects of Ignoring a Lawsuit 

The damage from a default judgment often extends well beyond the courtroom. In Florida, judgments are enforceable for up to 20 years and may be renewed — making them a long-term liability. While Florida judgments do not automatically appear on credit reports, they are visible in public record databases often used by lenders and insurers during underwriting. 

For closely held businesses or cases involving fraud or willful misconduct, personal liability may also be at stake. 

Operationally, a judgment may interfere with the ability to obtain or renew licenses, permits, and contracts. Vendors and customers who become aware of the legal action may reconsider doing business with you. Insurance carriers may increase premiums or deny coverage if they were not timely notified of the claim. 

The reputational impact can be significant. Lawsuits and judgments are public, and in some cases, may attract media attention. Clients, investors, and business partners may distance themselves, and new opportunities may be lost due to perceived instability or legal risk. 

Why Some Businesses Fail to Respond—And Why That Is a Mistake 

While failing to respond to a lawsuit may be understandable from a human perspective, it offers no legal protection. Some owners believe the complaint was not properly served or assume that the matter is too minor to warrant legal action. Others rely on informal advice or attempt to handle the issue without counsel, often underestimating the procedural rules and deadlines involved. 

Lawsuits sometimes end up in the wrong hands within the organization or are mistakenly dismissed as unimportant. However, courts expect timely and proper responses regardless of internal errors or misunderstandings. Failing to act can result in irreversible consequences. 

Common Mistakes That Lead to Defaults: 

• Assuming service was improper and ignoring the complaint 
• Failing to route legal mail to the appropriate person 
• Believing the claim is too minor to matter
• Relying on informal advice instead of legal counsel 

High-Risk Litigation Categories That Demand Immediate Response 

Some types of lawsuits are particularly risky to ignore due to statutory damages, fee-shifting provisions, and the potential for class actions. For example: 

• Telephone Consumer Protection Act (TCPA): Violations related to unsolicited texts or robocalls can result in damages of $500–$1,500 per message and triple that for repeat, wilful violations. Class actions can lead to exposure in the millions. 
• Fair Credit Reporting Act (FCRA): Claims involving inaccurate credit reporting or data misuse often carry statutory and punitive damages, even against companies that are not traditional credit agencies. 
• Fair Debt Collection Practices Act (FDCPA): Debt collectors may be sued for up to $1,000 per violation, plus attorneys’ fees. In class actions, exposure may be up to $500,000 or 1% of the debt collector’s net worth, whichever is less. 
• Data Privacy and Cybersecurity: Failing to protect customer data or disclose breaches can trigger regulatory enforcement, reputational harm, and private lawsuits. 

Can a Default Judgment Be Overturned? 

Reversing a default judgment is possible in some instances, but doing so typically involves increased litigation costs, procedural hurdles, and no guarantee of success. The burden rests squarely on the defendant. Florida courts require the moving party to show excusable neglect (such as improper service or a serious illness), a meritorious defense, and prompt action to set aside the judgment. Delays in seeking relief or failure to present a valid defense often result in the denial of the request. 

What You Should Do Instead 

If your business is served with a lawsuit, time is of the essence. Begin by reading the complaint carefully to understand the nature of the claims and the relief being sought. Immediately consult with a business litigation attorney to assess your exposure and risks, identify available defenses, and ensure compliance with all applicable deadlines. Also, gather and organize any relevant documentation, such as contracts, communications, and service records. This will help your attorney build your defense and may support early resolution. 

From there, work with your attorney to develop a strategy to either contest the lawsuit or negotiate a resolution. Even if the claim has merit, early engagement may allow for favorable settlement terms, dismissal of weak claims, or the avoidance of negative publicity. 

Conclusion

Ignoring a lawsuit does not save time or money—it increases both risk and cost. Even minor claims can result in default judgments with lasting impact on your finances, operations, and reputation. The earlier you respond, the more options you retain to protect your interests. At Jimerson Birr, we help Florida businesses respond strategically to lawsuits of all types—from simple contract disputes to complex class actions. If you have been served with a lawsuit, missed a deadline, or need to protect your business from potential default judgments, contact us today for a confidential consultation.