Disputes can be one of the worst things you have to deal with as a business owner, whether against clients, contractors, or former employees.
Knowing how to resolve business disputes efficiently is key in preventing further damage from occurring, and is a skill all business people should posses.
Create a Dispute Resolution Plan
In any crisis, being prepared puts you one step ahead of the situation. Having a dispute resolution plan in place allows you to be ready should any legal issues arise. Be detailed and cover as many scenarios in your plan as possible to avoid ambiguity in addressing problems, even in your absence.
Review Related Contract
Business disputes often involve a contract between your company and another party. The first step to resolving any dispute is to review the contract in question. Examine in particular the clauses directly affecting the dispute, the ones related to dispute resolution (if any), and the clause about contract termination. All of these will determine the next appropriate action.
Consult with a Lawyer
The next important step in handling a business dispute is to consult with a lawyer. If your business doesn’t have one already, then you must find a lawyer immediately regardless of how big or small the issue might be.
Your lawyer will review the issue at hand, develop the best strategy, and guide you accordingly. The key here is to be able to consult with a lawyer before taking any legal action. This will ensure that all your efforts will be productive for the business’ best interest.
Try to Reconcile
Issues that escalate to legal proceedings in courts can be very costly and time-consuming. If you own a small business or a new start-up, these court proceedings will surely consume most of your business resources. That’s why you should consider attempting reconciliation if the situation permits it and your lawyer see merit in doing so.
Find an Arbitrator
If reconciliation is not an option, then arbitration can be another good alternative to avoid court proceedings. Your business and the other party can select an arbitrator, who will develop a resolution that’s beneficial to both parties and compliant to all related industry standards.
This way of handling a business dispute is less costly compared to legal actions. If you and the other party will agree on the processes and the subsequent resolutions, there are no minor or complex business disagreements that arbitration can’t resolve.
Successful Litigation - The Key Steps
Should the business dispute escalate despite the reconciliation and arbitration efforts, your next action will be litigation or legal court action. As mentioned, this step in handling a business dispute is expensive and requires surmountable effort. So, it should always be your last course of action.
If you find yourself in a legal court action, then you must follow these key steps to ensure successful litigation:
1. Make sure that the business issue indeed requires legal action. It should involve the violation of your ownership or rights of your business. The business dispute may be a desecration of intellectual property rights, infringement of trademark or copyright, or unpaid goods or services.
2. Get in touch with the other party via post or email explaining your business issue. Make sure to attach a copy of your contract and suggest a way to resolve the issue. There must also be a deadline for the other party to agree and abide with your suggested resolution. Note that your letter should be firm, yet friendly and open for reconciliation.
3. If the other party has no response by the end of the deadline, then send a second letter. It should contain a copy of the first letter, the contract, and a notice to urgently settle the issue or you will be forced to take legal action.
4. Check if you have the financial resources to pursue legal action. Also, evaluate what litigation will bring to your reputation and relationship with clients. If you decide to proceed, make sure to have a lawyer and find out which court the case filing should be done.
5. Understand and perform the necessary steps in the legal proceedings, which include filing of a claim, preparation of testimony and witnesses, attending pre-trial and trial process, and receiving final judgment.
Factors to Consider for Legal Action
Legal action is a major step that needs to be taken seriously. Make sure you consider these factors first.
- Necessity for the action – Only proceed if the business dispute can’t be resolved with Alternative Dispute Resolution (ADR).
- Your business reputation – A legal action may cause a dent to your brand and business reputation.
- The overall cost – The resources required to take legal action may be more expensive than the actual value of the business dispute, which makes litigation not worth it.
- Long wait for court judgment – Most legal actions take a long time to be resolved. If you need a quicker outcome, then consider another course of action.
- Possibility of Losing – There is a risk of losing the legal battle. In which case, all your money and efforts will be wasted.
Handling a Business Dispute with Adams Wilson Lawyers
Whatever business dispute you may face in the future, remember to deal with it immediately and in the business’ best interest. Make sure to exhaust all alternative dispute resolutions before taking any legal action.
Lastly, ensure that you have the right lawyer to guide you in resolving any business dispute. Adams Wilson Lawyers can help you with that. With offices in Sydney and the Gold Coast, we have a team of professional business lawyers that can provide you with sound legal knowledge for business disputes and litigation.