Swift Commercial Dispute Resolution – Your Checklist to Achieve a Successful Outcome
Commercial disputes can be extremely complex and involve substantial costs, reputational damage and harm to previously successful business relationships.
Finding a swift, fair and enforceable resolution is in the interest of all parties.
Even if you have a valid claim or have grounds to reject a claim made against your business, it is important to present a watertight case to avoid future issues.
In this guide, The Law Firm Group explains the process for resolving a commercial dispute, with a checklist to ensure you have everything you need to succeed.
Commercial Dispute Basics
Before we get into more detail, let’s rewind to step one, when a dispute first arises.
Usually, this begins with an informal notice, such as a request for an unpaid invoice to be settled.
Disputes require a paper trail to evidence that attempts have been made to resolve the problem before escalating. If you haven’t tried to resolve a conflict at the early stages, it may be challenging to progress things further.
Where these efforts have proven unsuccessful, the claimant will need to consider the costs of legal action compared to the benefits of seeking legal support to recover damages, expenses, or monies owed.
Solicitors often use a pre-action letter to gently caution that the claimant will make a legal claim if the matter is not concluded by a finite date.
Sending a Letter Before Action in Business Conflicts
Issuing this letter does not constitute the start of litigation, and rather, it is an attempt to reinforce the claimant’s position, demonstrating the legal basis for the claim.
If you receive a letter before action, we recommend seeking legal advice immediately, as the time limits are not negotiable, and you need to respond as quickly as possible.
Proceeding to Court Action to Progress a Commercial Dispute
Should an agreement not be forthcoming, court processes can begin. This is a critical stage in a commercial dispute and usually avoidable with decisive, swift action and a willingness to negotiate.
Once you initiate or receive notice of court proceedings, you are subject to the court’s regulations around paying for costs.
At this step, a claimant will prepare a formal legal case by filing a claim form and the particulars, which explain their argument and why they are seeking a court-ordered outcome.
Defendants must respond to the claim within 14 days of the notice being served, to submit a defence, or acknowledge the court action.
The Commercial Dispute Resolution Checklist
For most businesses, avoiding an expensive, public, and potentially lengthy court battle is highly preferable, so putting together your claim or defence is key to a quick and acceptable outcome.
If you have received a letter before action or wish to initiate a claim, this checklist will help ensure you have all the background information ready.
|1. Review contracts and agreements||It’s crucial to refresh your memory about any contracts, agreements or negotiations concerning the conduct between the two businesses.
Many disputes involve confusion over the clarity of contracts, so going back to the original documentation is important to identify how either party has broken the agreement and when.
|2. Assess the loss||Whether as the claimant or defendant, you need to know the costs involved to make decisions about a settlement agreement, out of court negotiations, or proceeding to litigation.|
|3. Collect evidence||The more written documentation, the better!
Collect everything relevant to the situation, including emails, meeting minutes, contracts, agreements, statements referring to phone calls or verbal discussions, purchase orders, remittances and reports from other colleagues.
|4. Negotiate||If you can reach a mutually agreeable decision before litigation, you usually both stand to save a considerable amount in court fees.
We suggest recording negotiations with letters and notes, or minutes, agendas and meeting records to avoid further conflicts or misunderstandings.
|5. Consider alternative dispute resolutions||The commercial team at The Law Firm Group can advise on out of court agreement processes, including arbitration or mediation, which may help reach an amicable solution without the expense and publicity of a court process.|
|6. Identify likely outcomes||It’s essential to think about the likelihood of reaching the solution you are aiming for.
For example, if we consider the example earlier about an unpaid invoice, but you know that the other business is in severe financial difficulties, is it worth covering legal costs to instigate a court case if the potential for repayment is very low?
|7. Seek legal advice||If you haven’t already, now is a time to discuss the matter with an accredited commercial solicitor, assess the risks and rewards, and make clear decisions about the way forward.
Unless the dispute is straightforward, involves a small monetary value, and doesn’t seem to pose any risk of a counterclaim, legal advice is strongly advisable.
|8. Evaluate the strength of your claim||Most businesses in a conflict feel convinced that they are right, but you need to assess whether you have enough evidence and grounds to make a factual claim.
This process means looking at the legal position of the company and the documentation available. The potential for a counterclaim or even losing the case in court are also crucial factors.
|9. Estimate timescales and costs||Whichever legal action you take, there will be costs and timescales involved.
Speak with your solicitor to get a firm idea about the likely length of time before you reach an outcome and the total costs to decide whether the conflict is worth pursuing.
|10. Make a final decision||At this stage, you know how strong your claim is; you have all the evidence and benefit from legal advice about the right options for your business.
Now, you’ll need to decide whether you’re willing to compromise and perhaps accept staged payments, make a partial claim, or whether it’s worth abandoning the claim or pursuing full legal action.
Once your litigation has been finalised, you’ll still need to consider enforcement action, so a court case is often the last resort in a commercial dispute involving substantial amounts.
Expert Advice on Commercial Dispute Resolutions
If you need practical legal support deciding how to proceed with a business dispute or specific advice around commercial law relating to your claim, please get in touch with The Law Firm Group.
We’ll run through the situation, provide guidance, and help you choose the best approaches to successfully reach a favourable outcome, balancing risks versus rewards and costs versus returns.