Business disputes are an unwelcome distraction and can be time-consuming and costly for all involved. How you respond at the start can have a significant effect on the outcome.
Here are some top tips for managing disputes in those vital early days.
Knowledge is power – so investigate thoroughly and find out everything you can about the problem. Have early discussions with those involved and get as full a paper trail as you can.
Your priority is to establish the facts, not to point the finger – so reassuring your people that there is a no blame culture will encourage them to be open and honest, and help you understand the position more quickly and accurately. It is important to have all the key information before you take any steps.
Collate all key documents, including contracts and terms and conditions. If you do enter into any litigation in the future, you will be required to disclose all relevant documents, favourable or not, to your position. This is a strict obligation – and confidentiality doesn’t affect this – so be careful not to destroy or damage any documents, and ensure your staff are aware of this.
Remember that the term ‘documents’ has a wide meaning when it comes to disclosure and includes email correspondence, text messages and electronic data too.
Be careful when creating new documents about the dispute as these may be disclosable. Keep emails to a minimum, but when they are sent be sure to label them as confidential and ‘subject to litigation privilege’. If the reason for the document is the litigation itself, or with lawyers, then that document should not be disclosable.
At the start of this process, check if you have insurance cover which may cover any future liability and legal costs. If you do have cover, an insurer can have strict rules and requirements about how the dispute is run. Be sure to understand these requirements at an early stage so you do not jeopardise your cover.
Consider bringing in a commercial litigation lawyer as soon as possible, so they can advise you on your legal position and strategy going forward, including whether to begin negotiations at an early stage. This could save you a lot of time and money in the long run, and could help you to mitigate your risk as far as possible. Any advice given will be protected by ‘legal advice privilege’.
Your lawyer will help you analyse the legal position. They will carefully review written contracts and/or terms and conditions that apply to the relationship of the parties in dispute.
Communication with your opponent should be encouraged, but be careful about making open admissions or concessions that eat away at your position. If you are going to compromise or make a concession, be careful to make those communications with ‘without prejudice’ and confirm at the start of any meetings to discuss resolution that they are also to be run as ‘without prejudice’. Record decisions like these in writing so everyone is clear.
This way, the discussions at those meetings and contents of that correspondence are not allowed in open court or in open correspondence which is disclosable. This privilege allows you to explore commercial resolution without prejudicing your case in proceedings.
It is often easy to get personally invested in disputes, and emotions can run high. Dealing with disputes can be stressful but you should try to keep cool and adopt a commercial mindset – try not to let your heart rule your head. Having dependable advisors at your side can help keep you on track, and keeping perspective will help give you the best possible chance of reaching a resolution without going to court.
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