Disputes can be extremely time-consuming, so put someone appropriately senior in charge of resolving each dispute – preferably someone not closely involved with the situation leading up to it – and give them the time, staff and other resources to do the job.
Collate and review paperwork and information about what was originally agreed, such as standard terms or a bespoke written agreement, or evidence of the terms of any oral agreement, and what then happened. Assess where fault lies for what has gone wrong, including on your own business’ part. Be honest and open, avoiding witch hunts. Safeguard and preserve relevant records. See if individuals involved can be traced, and how co-operative (or not) they will be in helping you resolve the dispute.
Assess the loss or damage you and the other side have suffered as a result of things going wrong. Calculate what each of you might want from the other, both financially (including interest) and non-financially (eg for them to stop doing something). Decide what compromises you are prepared to make, eg accepting a reasonable offer or payment by instalments.
Assess your and the other side’s potential legal costs and who pays them if you win or lose, given the different fee arrangements available. Consider third party funding for larger disputes. Assess potential timescales for resolving the dispute.
Identify what you might be legally required to disclose to the other side if the dispute gets to court, including potentially damaging and commercially sensitive information, and whether you are happy to take that risk.
Check whether the other party will be able to satisfy your claim if you win and how you enforce any judgment against them (eg are they worth taking to court?) by carrying out credit and other checks and searches.
If you are not absolutely sure of your claim, strategy, etc, or if the other side might make a counterclaim, and it is warranted by what is at stake, take legal advice. In any event, follow any applicable procedures, eg writing a ‘letter before action’.
Open negotiations and record developments (eg in letters, emails and notes of who said what to whom and when), seeking an amicable solution. Follow any dispute resolution clauses required by your agreement, such as trying alternative dispute resolution or mediation.
Ensure communication with the other side is stated to be ‘without prejudice’. Take advice if you are unsure what this means. Do not concede or admit anything unless sure it is legally sensible to do so. Do not do anything that damages your claim, eg that accidentally ‘affirms’ a contract you are arguing has been terminated by the other side’s breach. If in doubt, take advice.
Keep conduct of the dispute confidential within the business and avoid creating new records (email, etc) that might be damaging. Ensure confidential records created for the purpose of litigation are kept separately from records that are not. Take advice if required.
Consider ways to pressure the other side. For example, a ‘Part 36’ offer to settle could result in the other side having to pay your legal costs if they refuse it, go on to win the case, but are awarded damages that are less than you offered.
Monitor developments and legal costs as events unfold.
Operative date
- Now
Recommendation
- Legal advice is almost always strongly recommended.
This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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