Process Server Tips for Combating Court Consumer Counterclaims

• November 17, 2020
• by Dave Rolf
• Articles

Editor's note: This article was written by Dave Rolf, CEO of Tag Process Service, Inc.. The opinions expressed here belong to Dave Rolf. This information is not legal advice and may not be used as legal advice. The information discussed or contained is not an explanation of the law and is presented for educational purposes only.

Many process servers rely on work from debt collection firms as this kind of work is often reliable and plentiful. As a result, process servers end up being in the middle of debt collection attempts when they deliver service of process, which can undoubtedly put servers in a tricky position if they are unprepared. For example, just this past summer, process servers in New Jersey found themselves in the middle of a lawsuit. Although no one is 100% immune from finding themselves the subject of a lawsuit, there is plenty that process servers can do to prepare for and combat costly litigation. Learn more by hearing from two excellent attorneys in the field, Ron Canter and David Anthony, and get tips on how you can avoid costly litigation by focusing on compliance and forging relationships.

Prevent Problems With Compliance

Maintaining compliance is of utmost importance — and even more important than merely being in compliance is documenting it. By following the FRCP, process servers are realistically doing the bare minimum. It is imperative that process servers follow the guidelines set forth in the Fair Debt Collection Practices Act (FDCPA) and engage in lawful service of process attempts, with complete documentation. Documentation of every aspect of a serve is important, especially when it comes to disputing false claims that could put a process server in jeopardy of being subject to debt collector classification, and as a result, legal liability. Use cameras when/where you are able, include detailed descriptions with dates and times, use GPS, etc. If there is ever a type of serve that warrants going overboard on documentation, it is debt collection serves. In my experience as a Certified Receivables Compliance Professional, I can tell you that strict compliance can save process servers from a lot of pain down the road. Process servers should embrace compliance at every step.

Assessing a Litigation Threat: Be Your Own Referee

When (and, unfortunately, not if) your process serving business is the recipient of a letter threatening legal action, assessing its validity, strengths, and merits is the first step to handling the threat. Perhaps it is simply a pro se litigant copying language off of a search engine to try and avoid payment. Perhaps the attorney representing the client doesn’t actually have jurisdiction to file the claim in the state (this is more common than you might think!). Perhaps the attorney hasn’t thoroughly vetted the claim and you know the invalidity. No matter what, the claim must be acknowledged and documented.

Ideally, outside counsel will not be necessary. Attorneys Ron Canter and David Anthony acknowledged that being entangled in litigious counterclaims, despite this being part of their practice, is not fun for anyone. Ensuring compliance will largely prevent counterclaims from even originating. However, even the most compliant among us may still find ourselves the recipient of a threatening letter or potential of a case. Hearing attorneys that represent our industry state how important it is to avoid heading to court solidifies my commitment to ensuring compliance now more than ever!

Never Ignore a Threat

Ignoring a consumer claim, even if unjustified, can become a compliance issue, and it is thus imperative to respond and file the letter for reference. In this event, it is important to locate and review all records associated with the service attempts. Be prepared, and have your documentation ready. Both Attorneys Canter and Anthony emphasized numerous times that even if the claim is nonsense, it is important to document and file the claim so there is a paper trail of how you have handled it. Part of the documentation is making sure you keep a file of all aspects, including any statutes or legislation that shows its invalidity.

Diffuse a Threat By Obtaining Legal Assistance

Responding firstly with a counterclaim can put the plaintiff immediately on elevated defense and perceptually admit guilt. As a result, a counterclaim should not be your first step in handling a consumer claim. If there is prior casework on a similar issue, responding with these judgments can put a claim to rest instantly. If you have an attorney on retainer, simply letting them know of the issue and having them endorse your response to the consumer can be an excellent first step in diffusing a lawsuit. In many cases, once you have shown that you have legal counsel available, plaintiffs who are attempting to pursue a fraudulent threat will back off.

Last Resort: Hire a Lawyer or Attorney

Various aspects of a consumer claim may ultimately require outside legal assistance. One helpful first step if the claim cannot be diffused is writing and filing a litigation hold letter to cover issues raised in your counterclaim. Filing and subsequently requesting information and documents needed to assess a counterclaim requires additional work from the plaintiff. This can satisfy many important aspects required to validate the claim moving forward. By analyzing the counterclaim, complying with audit obligations and regulatory authorities, and placing the ball back in the plaintiff’s court for additional documentation, process servers can figure out a strategy that can potentially protect them from harm and avoid running up extraordinary legal bills.

The litigation hold letter will also show you will be complying with and working on discovery. Once litigation is certain, there are many options for how the case will proceed. The frame of reference of the consumer is the first aspect to consider when determining how the case may proceed. When possible, it can be helpful to attempt to foster a relationship with the plaintiff through the attorneys, and work on some form of settlement. Once a lawsuit has been filed, the attorneys should be the only ones directly communicating with one another.

The ideal is to keep extensive, unnecessary litigation to a minimum and work in a collaborative, professional way, even if there is a contentious situation on the table. Having good working relationships on all sides, including transparent, compliant debt collection practices and open communication with established, trusted counsel can provide an excellent line of defense against lengthy, resource-heavy legal cases.

In Summary

While I don’t think this is new information to anyone, my experience becoming a Certified Receivables Compliance Professional has provided numerous concrete examples and truly solidified the importance of compliance in our industry. I hope this information highlights the wealth of information from legal leaders in our field and demonstrates not only the importance of compliance, but also the ways to ensure and maintain compliance through best practices. Feel free to reach out for advice on any aspect of compliance in the debt industry; if there is anything I have learned outside of the importance of compliance, it’s how important strong relationships are in our industry. I look forward to helping you, answering any questions you might have, problem-solving, and brainstorming best practices in our industry!