3 Ways to Prevent a Commercial Dispute

Commercial disputes are a known risk of running a company, however, there are a few things you can do to avoid them and reduce costs if one arises.

1. Review your boilerplate documents regularly

This is not a fun job, but it is an important one.

Commercial disputes are, in one way or another, based in contract. If a dispute arises with a sub-contractor, an end-user, a consumer, a shareholder, a purchaser or even a fellow director, the strength of your legal position will usually hinge on what we find in the small print.

We would recommend that the following documents are reviewed and updated at least once every year:

• Terms of business;
• Terms and conditions;
• Director’s service agreements; and
• Privacy policy.

You may need to have these documents reviewed more frequently if new legal updates come into effect.

If you are a larger enterprise and regularly enter into contracts with other parties, we recommend these documents are also reviewed regularly:

• Services agreement;
• Supply of goods agreement;
• Consumer goods terms and conditions;
• Outsourcing agreement; and
• Consultancy agreement.

The benefit of having these documents reviewed regularly by a corporate lawyer is that you can make sure the documents are legally compliant, fit for purpose, offer you the best protection and clearly set out the parties’ obligations.

Agreements that are clear from the outset reduce the scope for disputes.

2. Process, process, process.

Commercial disputes can arise where there has been an error in an internal process.

Perhaps an individual has not referred a possible dispute to senior management quickly enough or they have made a mistake and attempted to deal with it on their own. If this has happened, it can often make things worse. Therefore, it is essential that all disputes are referred up the chain of command promptly.

A company should have a clear reporting structure so that the directors of the business are aware of a possible dispute early on. This way, they can try and either resolve it effectively or mitigate it.

3. Retain a Law Firm

This may seem counter-intuitive to save costs but the cost of a typical annual retainer is far less than the cost of instructing solicitors to pursue or defend a claim.

Having a firm on retainer can prevent a commercial dispute from getting too far in the first instance, which can reduce costs in the long-term.

The benefits of having a firm on retainer is that:

• They will already have your details on file so there will be fewer administrative hoops to jump through in order to get advice, quickly;
• They will already have an understanding of your business and how it works;
• They will help draft correspondence from your business to another in order to prevent a dispute from growing; and
• They will provide initial advice early on which will help your business know what next steps it needs to take.

If a dispute has already arisen

If you are already involved in a dispute, please do get in contact with our commercial dispute resolution solicitors. We provide practical legal advice and can help your business achieve its goals, whether that is to pursue the case further or to opt for an early and commercially-driven settlement.

To set up an initial consultation:

• Give us a call on 0330 404 0767; or
• Fill in our simple online enquiry form and we will be in touch shortly.