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Lessons from a commercial dispute: learning the hard way

As experienced dispute resolution solicitors, we and our clients have learnt many valuable lessons about resolving disagreements over the years – sometimes, this has been via the hard way. In this video, dispute resolution solicitor, Simon Smith provides a brief overview of these lessons to help you understand what your options are when it comes to managing conflicts.

We have put together a handy summary of the main points Simon raises in the video, so that you can access the key takeaways quickly and easily.

What is a commercial dispute?

Whilst the answer to this question may seem simple, it’s not always clear what constitutes a dispute between parties. Essentially, it’s any situation where you and another party are not in agreement – whether that’s due to a misunderstanding, a mistake or perhaps a difference in each company’s terms and conditions when a trading relationship begins. Usually, something is at stake: this could be money, or the delivery of goods/provision of services.

Recognising the warning signs

You might be wondering what the best way is of recognising that there’s trouble on the horizon. In our experience, it is often when there feels as though there is a souring of the relationship between you and the other party, and it’s at this point that it is wise to seek legal advice before matters get out of hand.

Dispute resolution or litigation?

If you’re considering whether to engage in dispute resolution or litigation, it is likely that the disagreement has crystallised. You may find that communications have broken down and that you are at loggerheads with the other side. This is indicative of a problem that needs resolving in one way or another, and there are various ways that the issue can be dealt with.

Formal methods of resolving conflicts

  • Court action: This is fairly self-explanatory and refers to engaging with the litigation process. Whilst there are distinct advantages in terms of the potential rewards of success (a court order for damages in your favour and most likely a costs order in your favour too), the downsides of court action include that it can be a long, drawn out, expensive and stressful process.
  • Arbitration: In a nutshell, arbitration is another way to formally resolve a dispute. It is speedy and flexible, but you will be responsible for paying 50% of the arbitrator’s fees (often around £300 per hour plus VAT) in addition to your own lawyer’s fees.
  • Adjudication: This is another type of legal procedure that tends to relate to construction disputes. It is also efficient in terms of time (parties are given a decision within 28 days), but on the flip side, this means that not all aspects of your case will necessarily be addressed.

Informal methods of resolving conflicts

  • Party to party: This option is of course only available if lines of communication have not broken down. The main plus point of this is that it can be quick, avoids legal fees and gives you and the other party control over how the disagreement is settled.
  • Solicitor to solicitor: This is where the lawyers talk to each other on your behalf, and is the most common method of informal dispute resolution. It can be quick and flexible, but it can also be costly and uncertain – depending on the matter at hand.
  • Mediation: Whilst mediation is slightly more formal than the above two methods, it is ultimately a negotiating process. It’s important to realise that the mediator doesn’t make decisions, because the aim of process is to help you and the other side sort out your differences.

General lessons & conclusion

Ultimately, you may find yourself in a situation where engaging in dispute resolution or litigation is inevitable. What’s crucial is the need to be prepared for it: this includes rigorous record keeping and drawing up clear agreements at the outset, so everyone knows where they stand with what should happen if things go wrong. There is no need to be afraid of legal action, provided that you’re primed. Contact our team of specialist business dispute solicitors today if you could benefit from some advice and support in this area.


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