Forget fisticuffs

• Be realistic and be prepared

  Nobody goes out of their way to start a dispute, but at some stage it is likely to come along despite your best efforts to avoid one. Disputes come in all shapes and sizes and can be very damaging and distracting for both parties. It makes sense to be prepared

  

• Relationships matter

  A dispute with a supplier or customer is not ideal but does not have to be a terminal event in the relationship. How can it be managed in a way that is fair and reasonable and least damaging to the relationship?

• Where to start?

  It is good practice to have governance processes in contracts involving the key personnel of both parties. This should include an escalation process in the event of a dispute. This can help to defuse a potential dispute as it should allow both parties to pause, reflect internally and to change the personnel involved

• Mediation is a must

  There are some inherently strong arguments in favour of mediation rather than going straight to court, not least the less confrontational environment of a mediation process. It is a forum that encourages honest and constructive dialogue. But courts now also expect – and can insist – that parties mediate before going to court

• Expert determination may work for some disputes

  For some very technical disputes, such as revenue shares with very complex cost and payment mechanisms, an independent expert can be sensible way to determine the outcome. It is important to agree on the mechanism for appointing the expert and their remit

• What if the other party wants to ignore the mediation clause?

  Although English courts used to take the view that people should not be denied access to the court system, they now prioritise parties settling a dispute in advance of a hearing. There can be adverse cost consequences if a party unreasonably refuses to participate in mediation proceedings. To help ensure mediation clauses are enforceable, they should include clear provisions including timelines, appointment mechanism for the mediator and procedural rules to be followed

• What if mediation doesn’t work?

  Mediation is often a good option to resolve a dispute, but occasionally it may not be possible to break a deadlock between the parties. The obvious default option is court proceedings, but it is worth considering arbitration instead. It has some of the same advantages as mediation, it tends to be quicker, more cost-effective and is not public.
  It is not possible to legislate for all eventualities or the behaviour of the other party to a contract, but it is worth considering what would give your business the best chance to resolve a dispute in a way that allows the relationship between the parties to continue and hopefully to flourish!

If you’re facing a dispute and want some help resolving it without going to court, please get in touch.

You might also be interested in some of our other articles Top tips on commercial disputes – My Inhouse Lawyer and Alternatives to litigation – My Inhouse Lawyer and How to avoid a dispute – Lawskool