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Business Law Disputes

When running a business, it is not uncommon to get involved in disputes with customers, suppliers, employees and competitors. Business law may address these issues but it is important that you are able to resolve problems when they arise.

Having an efficient and effective dispute resolution system in place is therefore particularly important in order to minimize the effects of any grievance someone may have with your business. Failure to deal with a problem promptly and thoroughly could end up costing you valuable time and money, or even land you in legal trouble if the individual in question is found to have a valid complaint.

When a dispute arises it is recommended that you seek legal advice from a specialist in business and commercial law and make a genuine attempt to settle the dispute by corresponding with the other party.

Check the contract between you and the other party as it may contain clauses that outline the procedure should any dispute arise. There may also be a termination clause which explains how either party can cease the contract.

Remember to keep all relevant correspondence and documents as any third party, such as an arbitrator, will need these to be able to build a full picture of the dispute. You must comply with the relevant Code of Practice issued by the BSI when storing electronic versions of documents.

Litigation

If your internal dispute resolution procedures failed to resolve the problem, the next step to take is litigation. This involves using the courts and it is usually necessary to follow a “pre-action protocol”, which may encourage the parties to settle the dispute before the case reaches court.

Litigation through the courts can be very expensive; legal costs are front loaded and significant fees will be incurred before the case has even begun. Although the losing party generally pays the costs of the successful party, only around 50-70% of this is usually recovered and the successful party may still be liable to pay substantial legal costs.

By their very nature, court proceedings are somewhat inflexible and generally involve much time and effort, so you should always consider other options for resolving disputes such as arbitration and Alternative Dispute Resolution (ADR).

Arbitration

Arbitration is similar to court proceedings, but a great deal more flexible. The parties involved in the dispute can choose the arbitrator and agree on what procedures should be followed. This allows for a resolution service that is more tailored to the specific needs and industry standards of the parties involved.

However, arbitration is not necessarily any cheaper or expedient than litigation and arbitrators may not be as reliable as court judges.