Litigation is quite rightly regarded as a last resort in business relationships. There are few small to medium sized businesses that can afford to regularly engage in legal proceedings. The loss of productivity as key staff are diverted from their usual responsibilities adds to the direct financial impact.
At Pearce Webster Dugdales we have found that good preparation can assist in avoiding business litigation entirely or result in an efficient resolution before legal proceedings are issued. Our top preparation tips are –
1. Seal the deal in writing from the start
It is sometimes said that a verbal agreement is not worth the paper it is written on. A clearly drafted contract that specifies what is required of each party and their entitlements can bring a quick end to misunderstandings. The written contract can be used as an agreed reference point so that your employees can do the right thing from the start when dealing with the other party.
2. Clear, effective communications and strong relationships
Establishing clear lines of effective communication is a key foundation of a strong business relationship. A strong relationship results in mutual trust and respect and reduces the chance of a dispute occurring in the first place.
3. Fix the little problems before they become big ones
If the other party is regularly referring to performing some aspect of their end of the bargain as a “challenge” it can be a sign of trouble ahead. Acting promptly to find out what the underlying problem is and resolve it before it develops into something bigger. If the solution involves varying the contract, the changes should be put in writing.
4. Good organisation and record keeping
One of the first tasks to attend to in when signs of a dispute emerge is to work out exactly what has happened. A properly organised system of storing and retrieving relevant documentation that records your interactions from the commencement of negotiations will help you make an informed assessment of your position. It also assists when seeking external advice because your adviser can gain an understanding of the relevant facts more promptly.
5. Get a second opinion
An independent person can offer a new insight or even a solution that you might not have considered. Early advice about the legal issues arising from your situation is invaluable in deciding on a pathway to negotiating an acceptable commercial resolution. If litigation is unavoidable, legal advice about your rights and relevant procedures can assist in identifying a way to best manage what is to come.
Please feel free to contact one of our experienced litigation lawyers to discuss how to avoid disputes or resolve those that have already commenced.