When you first realise you are entering a business dispute, no matter what size, the first thing you should do is seek legal advice. While you are doing this, try to keep any communication between the disputing parties to a minimum, and when it is necessary keep it strictly professional – you don’t want to add libel to the dispute list! However we do recommend that correspondence contain a genuine attempt to resolve the dispute, and copies of all correspondence is kept in case it is needed for evidence later.
A lot of disputes often occur over the termination of a contract or a breach in service. Because of this you should make sure you have thoroughly read all the fine print (and the large of course) for any clauses that may impact the way disputes are to be settled (for example there is likely to be a Jurisdiction of Choice clause, which sets out which country’s courts have jurisdiction over the case). Make sure you have followed all rules set out in the contract and have made every attempt to settle the dispute at the first hurdle.
Sadly it’s not always possible to solve a dispute through a simple conversation, and that’s when litigation comes into play. This is a more traditional form of dispute resolution, and involves taking your case to court to be decided over by a judge. You can only get to the litigation stage if you have followed the ‘Pre Action Protocol’, which lays out what steps you and the other parties involved must have taken. Legal costs for litigation are front loaded and often costly, with no more than 50-70% of the costs being recoverable by the wining party. The court system is very formal and based on a strict legal structure, and not very flexible in individual cases. This is often considered a last ditch approach after attempting other methods.
Arbitration is essentially the private version of litigation. The parties can agree, either in contract or in writing, to allow the dispute to be differed to a third party for a binding decision on the matter. The advantage of taking this route over litigation is the flexibility it gives. Party’s can chose the arbitrator of their case, and this gives them the scope to chose someone with industry knowledge and specialist expertise to weigh in on the subject. If the parties cannot agree on an arbitrator, then a particular body (such as the Institute of Arbitrators) can appoint one for them. Arbitration is also, of course, completely confidential, and not a matter of public record. There are still fees to pay, such as arbitrators fees, hire of facilities etc, but they often prove slightly cheaper than court proceedings.
If your dispute involves a business premises, our commercial property lawyers are the ideal fit for any business looking to settle a dispute amicably and with as little disruption as possible. To get us involved, discuss your needs with a team member today.
There are of course other ways to resolve business disputes in a quick and painless way, which we will go into in another blog next month, but the more traditional methods still hold some ground today. Arbitration is one of the most popular choices, as it allows flexibility and understanding of the unique circumstances in each case. For advice about a business dispute you are experiencing, or representation for one, get in touch with our dedicated team today.