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If you have been served with a court claim (often called a Statement of Claim), the most critical thing to do is act immediately. You typically have only 28 days from the date you were served to file a formal response with the court. Dane Thornburgh, Senior Associate at Quinn Law Group, explains what you should do if you’ve been served with one.  What should I do if I’m served with a court claim  Most importantly, don’t panic. Read the documents carefully and identify the plaintiff and the defendant. The plaintiff is the person or entity who starts the legal case, and the defendant is the person or entity being sued. Make sure you understand exactly what is being claimed and why.  Do not ignore it. If you do nothing, the plaintiff can apply for a default judgment after 28 days. This means the court can order you to pay the full amount plus interest and legal costs without a hearing.  The filing of a court claim against you does not mean you must accept the allegations made against you. In most cases, you are not required to comply with what is being asked unless a court order specifically directs you to do so. You may choose to comply with the claim by paying money or taking (or stopping) certain actions.  If you don’t agree with the claim, you have the right to dispute it. Your options include:  In your defence, you can explain your position. Being named as a defendant does not mean you have done anything wrong.  Seeking legal advice  Getting legal advice is important because strict rules and deadlines apply. Missing them can result in automatic loss. A lawyer can help you understand your position and options, including:  Potential outcomes of doing nothing Ignoring the claim is risky. The court may issue a default judgment against you for the full amount plus costs. This can lead to wage garnishment or property seizure.  Need more information? If you would like to know more, contact Dane Thornburgh to arrange a free initial appointment on dane@qlglaw.com.au. Dane Thornburgh is a Senior Associate at Quinn Law Group with over 23 years of legal experience as a solicitor and former barrister. He has advised major clients including ANZ, Facebook, Samsung, KFC, The Star, and SpaceX in commercial litigation matters. His experience covers dispute resolution, litigation, family law financial matters, and commercial litigation. You can view his notable cases here. 

When you’re navigating a separation or divorce, it is not uncommon for a situation to arise where a company run by co-directors also becomes involved in a family law dispute over the operation of a company and or the monies received. In this article Dane Thornburgh, Senior Associate at Quinn Law Group, explains what a derivative action is, when it may be suitable, and other important factors. Many directors, shareholders and other company officers, whether involved in a family law dispute or not, are often unaware that when a dispute arises between directors and/or shareholders of the same company, they have legal standing to do something about it on behalf of the company, by way of commencing a derivative action.  What is a derivative action? A derivative action may be required in family law proceedings when a spouse or third party (as a shareholder/director) needs to protect corporate assets from being depleted by the other spouse, and the company itself will not take action against that wrongdoing.  A derivative action is generally an action brought by the company against a director for a breach of duty, but where a company cannot or does not bring that action, the court allows the members to bring the action on behalf of the company.  This type of action is common when a company/business is part of the matrimonial assets but is controlled by one party who refuses to act in the best interests of the company.  A derivative action enables a person, typically a shareholder or officer, to bring legal proceedings in the name of the company. This action is unique as it allows a person to litigate on behalf of the corporation, even though the right to initiate such proceedings ordinarily resides with the board of directors. Notably, any benefit arising from the litigation accrues to the corporation, not the individual bringing the action.  The right to bring a derivative action is open firstly, to a director of a company who may choose to pursue a derivative action by establishing certain factors giving rise to the right to act on behalf of the company.  Alternatively, where shareholders have been oppressed by the conduct of the directors, they also have a right to bring an action against the directors on behalf of the company.   Both of the above avenues are common in family law situations, where one of the parties is also a director or shareholder of the former family company.  What are some scenarios where a derivative action may be suitable?  Some scenarios that may indicate the need to bring a derivative action include: What key factors are considered by the Court?  When seeking a derivative action, courts primarily consider whether the lawsuit is in the company’s best interests, if the applicant is acting in good faith, and if there is a serious question to be tried.  The party seeking the derivative action must usually also demonstrate that the company itself is unlikely to bring the proceedings. Some other relevant factors the Court may consider are: These actions are typically governed by statutory provisions (e.g., s 237 of the Corporations Act 2001 in Australia), which exist to prevent frivolous or purely personal lawsuits.  How Quinn Law Group help?  If you’re having a dispute with a business partner or shareholder and require assistance, contact us and ask to speak to Dane Thornburgh to see if we can help. Dane Thornburgh is a Senior Associate at Quinn Law Group, contributing over 23 years of substantial legal expertise as a Solicitor and previously as a Barrister. His distinguished career spans family law and commercial litigation, complemented by a strong background in several related practice areas.  This blending of advocacy and legal knowledge provides clients with significantly lower legal costs, effectively combining a seasoned advocate and an experienced Solicitor in the one practitioner. Read more on Dane’s experience by visiting our About page.