Commercial Disputes and Claims

Resolving disputes and claims

 

Disputes are an unfortunate fact of business life. However hard we all try to minimise the risk of these they inevitably occur from time to time. They are time consuming, expensive and a diversion from the real purpose of your business. When one arises the aim should be to resolve it on the best possible terms as quickly as possible. The 'best' terms will usually be a compromise that recognises the cost and risk to the business while providing the optimum result under all the circumstances. This will rarely be achieved by a vicious fight to the death, with the lawyers being the only real winners.

Commercial disputes and claims come in variety of guises ranging from small easy to negotiate problems to substantial claims involving millions of pounds. They may be with suppliers or customers, over contracts, about money owing to you, or even between the proprietors of the business. They all, without exception, absorb management time and are a waste of money. A cost benefit analysis quickly shows they all need resolving robustly and as soon as practically possible. Unfortunately your protagonist may not be of the same mind; and that is where problems can begin.

The dispute resolution armoury

 

We have an experienced commercial dispute resolution unit to help you, and they have available to them a range of weapons to help resolve your dispute or claim:

  • Negotiation - before you come to us you will have tried this yourself, but there can be times when our involvement, or our ability to talk to lawyers on the other side, can produce a settlement.
  • Litigation - this is the traditional dispute resolution technique available to lawyers and is often inevitable if the other party cannot be brought to the negotiating table or won't see sense, and very often court proceedings have to be issued because the other side will not take active steps to resolve matters. It is a fairly blunt and expensive option and if taken all the way to trial the ultimate result is in the hands of a judge whose decision can sometimes be something of a lottery. Most cases settle well before trial and there is increasing pressure from the courts to make this happen, see The 'New' Landscape below.
  • ADR - Alternative Dispute Resolution - which describes dispute resolution techniques alternative to litigation, including:
    • Mediation - this is a powerful technique where a neutral third party via 'shuttle diplomacy' brings the parties to their resolution of their dispute and a binding settlement agreement. we are one of the most experienced users of Mediation in the North of England. Mediation is quick to set up, very cost effective, and can maintain business relationships which could otherwise be seriously damaged.
    • Arbitration - this is a long established process which is in effect private litigation which does not take place in the public eye.
    • Neutral evaluation - a relative newcomer where a neutral third party is asked to give a non-binding opinion as to the legal merits of the dispute.
    • Expert determination - where an expert is asked to give a binding opinion on an issue within a dispute, or the dispute itself. Particularly useful in 'scratch and sniff' disputes where an expert can judge quickly on a specific issue (e.g. whether a product matches a sample) which will resolve the issues.
    • Mini-trial - a rarely used but effective technique involving a neutral third party sitting with a representative of the each protagonist to judge the issues. Can be very effective in appropriate circumstances.

Speeding the legal process


In 1999, as a result of recommendations in a report produced by Lord Woolf, a new set of court rules,  the Civil Procedure Rules (CPR), came into force heralding a then completely new way of conducting litigation through the courts. They introduced the 'overriding objective' of enabling the court to deal with cases 'justly', and so far as is practicable:

  • ensuring that the parties are on an equal footing;
  • saving expense;
  • dealing with the case in ways which are proportionate -
    • to the amount of money involved;
    • to the importance of the case;
    • to the complexity of the issues; and
    • to the financial position of each party;
  • ensuring that it is dealt with expeditiously and fairly; and
  • allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases.


Since their introduction the CPRs have changed the face of litigation and the culture of commercial dispute resolution.

Parties are expected to work actively to resolve disputes and claims. Full details of claims and defences need to be given to the other side before proceedings are issued, and in some cases pre-action Protocols have to be followed.

 

There must be good preparation prior to issue of proceedings, as the court manages the progress of claims to tight timetables once a claim is issued, and rabbits cannot be pulled out of hats at a late stage. The court will encourage attempts to use ADR processes, such as mediation, to settle matters and avoid court hearings. The courts have also demonstrated that they are prepared to use financial penalties to control parties who do not act in an appropriate way.

The CPRs were revolutionary when introduced but are now well tried and tested and claims now settle faster, and there is active use of processes such as mediation to keep cases away from court if possible and for costs to be more proportionate. 

 

Start early


As you can see, it is very important to deal with your disputes properly from a very early stage and Raworths' Commercial Dispute Resolution Unit can help you do this.

If you would like any further information please contact Ralph Court,  Robert Minors or Matt Hill