How to manage the risks and weigh up your options if you’re involved in a business dispute At a glance
- Business disputes are common, yet managing the risks effectively can reduce their potential impact.
- It’s important to get expert legal advice as soon as possible.
- Be realistic about the dispute; for example, can your opponents pay up if you win?
- There may be other ways to resolve your dispute which could save you time and money, including settling early or using alternative dispute resolution.
- If you decide to go to court, make sure you can fund it, either from your own resources or one of the alternative funding methods.
Although it’s a prospect you may rather not think about, the reality is that most businesses will face a dispute at some stage. We understand that dealing with a dispute can be worrying, disruptive and potentially costly, but there are effective ways you can minimise and manage the risks.
Get legal advice as quickly as possible.
This will help assess the strength of the case against you, devise a strategy for dealing with the dispute and give you an idea of how long the case might last and cost if it goes to court.
If you delay taking legal advice, there’s a risk the dispute could escalate and become more difficult and expensive to resolve. There is also the chance that someone in your business might inadvertently say or do something that weakens your case.
Choose your legal advisers carefully.
Your solicitor should have the resources to cope with the size and complexity of your case, along with a thorough knowledge of the relevant law and experience of similar cases.
Whilst using a cheap lawyer might be tempting, you could find they take too long and offer little chance of success. You’ll have better results with an experienced lawyer who acts quickly and knowledgably to maximise your prospects of winning.
Collect and preserve all the evidence.
As soon as you know there may be a dispute, gather together all the relevant documents (including electronic documents), together with a detailed statement about the case. This will help us give you an accurate early assessment.
Whether it supports your case or not, evidence has to be disclosed during the litigation process.
A piece of machinery or sample product may also be a key piece of evidence; keep it secure so no one can remove it or tamper with it.
Be clear about your objectives.
Although you may feel you are in the right, it’s worth stepping back to consider the consequences of the dispute. Do you want to continue your business relationship with the other party? Could the dispute cause negative publicity or damage your reputation? Or is it important to pursue it because it’s vital to your commercial success or could give you a business advantage; for example, by recovering significant sums or protecting your intellectual property rights?
Work closely with your legal team.
Tell us the weaknesses and strengths of your case, so we can assess your prospects accurately. You should also let us know if something changes that might affect your case, so we can develop a new strategy if necessary.
It’s essential to know the realistic strength and value of a claim in order to weigh up the likely costs and whether it makes financial sense to proceed. Courts are now very focused on managing cases so their costs are in proportion to the value of what’s in dispute.
It is equally important to find out as much as you can about the other party’s financial position. Winning might be meaningless if they are unable to pay.
Consider settling early.
Most business disputes settle, saving the parties time, money and possible negative publicity. A settlement can be negotiated at any time, before or during proceedings, and the earlier the dispute is settled, the sooner you can get back to focusing on your business.
Both sides can negotiate ‘without prejudice’, which means you or your opponents can make offers or concessions without them being used in evidence.
If these types of negotiation aren’t appropriate or successful, it is worth considering alternative dispute resolution methods.
If you reach a settlement, keep a record of its terms.
However you reach a settlement, the terms should be recorded in a document that’s binding on all parties. This ensures that there are no misunderstandings, and that the terms can be enforced if necessary.
Be confident you can fund a court case.
If negotiation or alternative dispute resolution don’t result in settlement and you still want to defend or pursue your case, going to court (litigation) is your only remaining option. Your solicitors should advise of your likely costs from the outset, and keep you updated as the case progresses. Bear in mind that you may have to cover not only your own legal costs, but also the other party’s if the case goes against you.
We can explain ways of funding business litigation and minimising the risk of costs against you; these include insurance, third party funding and sharing the risk with your legal advisers. Our advice will help you make an informed decision about whether you can afford to go ahead with litigation or if it’s necessary to be pragmatic, whatever the strengths of your case, and accept a settlement.
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