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If you have experienced employment disputes, late payments or non-payments from customers, shareholder disputes, supply chain problems, people stealing your secrets or ignoring your intellectual property rights, as well as cybersecurity issues; you will understand how much hassle business disputes can cause.

These problems affect small businesses as much as multi-national corporations. The main difference is that SMEs the majority of times do not count with big legal budgets so they have to be incredibly astute as to how they manage and resolve commercial disputes.

Business legal disputes can cause significant disruption to a small business and in today’s world of online reviews and social media posts, disputes can cause irreparable reputational damage. The trick to avoiding a minor dispute erupting into a full-blown battle is to get advice from a Business Disputes Solicitor as soon as a disagreement becomes apparent.

How can I avoid a business dispute?

The best way to deal with business disputes is to avoid them occurring in the first place. There are several things you can do to mitigate the risk of a dispute developing:

  • Have robust commercial, consumer, supplier, and employment contracts in place which includes detailed clauses governing how disputes are to be dealt with.
  • Ensure you have clear terms and conditions which explain how you conduct your trade. These should include your policies on delivery, pricing, cancellations, and late payments.
  • Deal with problems swiftly. Many disputes that wind up involving Dispute Resolution Solicitors could have been managed via a well-drafted email or quick phone call. Always keep the lines of communication open with your employees, partners, suppliers, and customers and ensure they know they can come to you in the first instance if a problem develops.

Unfortunately, some commercial disputes are unavoidable. If you find yourself embroiled in one, see below the steps you can take to protect the interests of your small business.

Step one – Get expert legal advice

If you have tried to resolve the dispute informally through emails, phone calls, and/or meetings and things are starting to escalate rather than calm down it is vital to contact a Disputes Resolution Solicitor for advice. It is likely they have advised on a similar situation in the past and will use tried and true tactics and strategies for resolving matters as quickly and cheaply as possible.

Step two – Consider alternative dispute resolution methods

Alternative dispute resolution methods (ADR) provide a less expensive and faster way to resolve business legal disputes in comparison with formal litigation. Furthermore, ADR methods are confidential in terms of the details of the dispute and any settlement reached or, in the case of arbitration, an award handed down.  

The most common forms of ADR include:

  • Negotiation - solicitors will negotiate the particulars of the dispute on behalf of the parties over the phone or in person. Alternatively, round table negotiations can be organised. 
  • Mediation – a voluntary process in which an impartial Mediator will assist disputing parties throughout one or several meetings to reach a voluntary agreement.
  • Adjudication - primarily used for construction contract and professional negligence disputes, an Adjudicator, who can be appointed by the parties based on his or her qualifications and experience, makes a ruling regarding the dispute. Unless an extension is agreed upon, the adjudication process must be completed within 28 days. 
  • Arbitration - parties enter into an Arbitration Agreement which sets out when and how arbitration is to be conducted to resolve a dispute. Arbitration awards are usually binding and can be enforced internationally.

A Commercial Disputes Solicitor can advise you on what method of ADR will have the best chance of getting your dispute resolved.

Step three – be prepared to go to court

Going to court is a last resort option and something the best Dispute Resolution Solicitors avoid in so far as possible. Sometimes, however, there is simply no choice – the stakes are too high and both parties’ positions too entrenched to avoid court proceedings. 

It is important that you discuss the risks and opportunities litigation presents with your Solicitor. You may also want to explore the option of litigation funding. Many funders now offer solutions for small businesses, allowing them to pursue litigation without taking on the risks involved.

Your Solicitor can talk to you about various funding options available and associated risk mitigation products such as After The Event (ATE) insurance.

>> Watch our video How to resolve a business dispute to learn more!

Wrapping up

With good legal advice and well-drafted contracts, most business disputes can be resolved outside of court. To find out how our Dispute Resolution Solicitors can advise and represent you, please contact us today.

Get legal assistance from LawBite

As a business owner, it is important to receive the legal advice your business needs to be protected. LawBite’s expert business law solicitors are ready to help you review and draft new contracts and assist you with all the legal questions you may have regarding alternative dispute resolution methods. 
In the event of court litigation, we're well equipped to represent you. For litigation we charge £255 per hour (+VAT) with a minimum of 7 hours per matter. You can find out more about how our rates work here.

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In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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