Disputes are commonplace in business and can arise for various reasons.
Internal misunderstandings with employees, board-level disagreements between shareholders, and contractual disputes involving customers and suppliers can all flare up at different times during a company’s lifecycle.
The sheer depth and breadth of the commercial arena makes it unlikely that businesses can ever be completely immune to disputes: something is always liable to ‘fall over’ at some point.
However, there are several steps that company owners can take to minimise the risk to their business. Forward thinking and advance planning can be hugely beneficial, reducing the chances of a dispute occurring and ensuring that, if conflict does occur, any flashpoint does not trigger a domino effect, which could prove catastrophic.
In this blog, our Commercial Litigation solicitors consider some common causes of business disputes and give their top tips to avoid them.
What are some common causes of business disputes?
Commercial disputes can occur for many reasons and involve various parties that contribute to an organisation’s operations.
A commercial dispute can be internal (for example, between shareholders, partners or business associates) or external (involving service providers, contractors, or customers).
Disagreements are commonly sparked over the provision of products or services, whether from a supplier or to a customer, or can involve a contractual dispute over certain terms and their interpretation.
The exact essence and cause of a commercial dispute varies depending on the specific industry, size, and nature of a business. Some common points of contention for businesses include:
- Contractual disputes.
- Professional negligence.
- Shareholder disputes.
- Breach of confidentiality.
- Issues with the supply of goods and services.
- Intellectual property disputes.
Can business disputes be avoided?
It is highly unlikely that commercial disputes can ever be avoided entirely. Even the most reasonable of business owner is likely to be caught up in a difference of opinion at some point during their professional life.
However, there are various contingency plans that anyone running a business can implement to reduce the risk of a dispute occurring. Furthermore, if certain steps are followed, business owners can manage the risk to their organisation and avoid a minor conflict escalating into a full-blown dispute.
Seeking legal advice at the earliest opportunity is often one of the most effective ways to proactively resolve a potential dispute. Early intervention can help diffuse a situation and can help to nip an issue in the bud before it gets out of hand.
At Larcomes, our commercial litigation solicitors understand the need to act quickly when a dispute arises to resolve it effectively to avoid any unnecessary fallout on your business. Our experienced lawyers provide practical and pragmatic legal advice to business owners operating across many industry sectors and can advise on the most appropriate dispute resolution techniques for your situation.
How can business owners avoid commercial conflicts?
There are several steps that company owners can take to minimise the risk and impact of business disputes. These include:
- Well-drafted contracts and agreements. Unambiguous and watertight contracts and other agreements that clearly set out the rights, responsibilities, and liabilities of each party are crucial. Legal advice from a specialist commercial contract solicitor is invaluable in protecting your business, its relationships and its interests.
- Effective due diligence. Researching thoroughly any new business opportunities and undertaking background checks on new suppliers and individuals can highlight any ‘red flags’ before a new partnership is formalised, thereby avoiding issues further down the line.
- Paper trail. Implementing an effective file management system that allows you to quickly access all relevant documentation and paperwork relating to a client or supplier ensures you have all the information to hand should a dispute arise.
- Regular staff training. Comprehensive and robust internal policies and adequate and appropriate ongoing training for staff can prove hugely advantageous in building a firm foundation that will help a company withstand disputes. Ensuring any customer-facing staff are sufficiently trained in handling complaints can diffuse a complaint from a frustrated customer at an early stage and can also greatly help damage limitation.
- Early intervention. If a disagreement does occur, acknowledging it and attempting to resolve it as soon as it comes to light can significantly limit the fallout on your business.
How can a business dispute be resolved?
Litigation should be the last resort in commercial disputes. Relying on a court to decide a dispute on your behalf can prove costly, time-consuming, and significantly damage a company’s reputation.
There are various ways a business dispute can be resolved without recourse to litigation. An experienced commercial dispute resolution solicitor can talk to you about the options available and advise on the most appropriate course of action.
Some popular methods of resolving commercial disputes include:
Commercial Dispute Solicitors
Larcomes’ team of specialist commercial litigation solicitors have the breadth and depth of experience necessary to deal with all kinds of complex commercial and regulatory disputes.
Our experienced commercial dispute resolution solicitors can advise business owners, large enterprises, entrepreneurs, SMEs and start-ups on a wide range of business disputes, including:
- Commercial Disputes.
- Insolvency Litigation.
- Professional Negligence.
- Environmental Litigation.
- Health and Safety.
- Intellectual Property.
- Judicial Review.
- Shareholder/Partnership Disputes.
- Breach of Contract.
- Debt Claims.
- Business Disputes.
We will work with you to offer practical and pragmatic advice to ensure your dispute is resolved quickly, cost-effectively and to your satisfaction.
Please note that this article is not intended as legal or professional advice. It is for general guidance only, and updates to the law may have changed since it was published.