Sun Tzu
Introduction
Over the years we’ve helped many of our clients with disputes. It seems obvious that if you go to a surgeon, they’ll recommend surgery. So, if you go to a litigator, they’ll likely recommend litigation. Yet we approach things differently, very much based on our knowledge of the business and wanting to ensure that your end-goal doesn’t become an own-goal.
Here are some practical tips to consider when you’re looking at a commercial dispute (whether you’re the instigator or the defender). They illustrate the kind of conversation we have with clients right upfront before any hard-to-reverse steps are taken.
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Do nothing
That is, until you’ve got some proper legal advice. Don’t be tempted to get on the phone. From the moment there’s even a whiff of a dispute, what you say and how you react will matter. Too often, we see people making admissions early on that come back to bite them. The first people to call are your lawyers (hopefully us) and your insurers.
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Never lose sight of the big picture
Think about the sums/risks involved. Always be asking how the time and money you’re spending on the dispute compares to the sums/outcomes you’re pursuing. This is a continuous exercise you’ll perform throughout the dispute. Don’t expect your law firm (unless it’s us) to do this for you. You need to be the one to call time on a dispute that’s costing you a fortune but going nowhere anytime soon. It’s not unusual to spend six figure sums on legal fees with law firms for relatively small disputes.
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Check your emotions
This is all about perspective. We often get calls from business owners who are anything from upset to furious about something done and want to take the other party to court for a principle ‘no matter the cost’. Even as we empathise, we know that principles don’t pay. At these times, it helps to have someone around who can be impartial, objective and keep it real for you when you can’t. Someone who can (gently) spare you from spending good money after bad.
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Know your purpose
What are you fighting for and what are you protecting? Sometimes for example, it’s about a principle, sometimes it’s about precedent. Other times it’s about reputation or lost income. Always be clear about why you’re going in and what you want coming out. Think on your range of outcomes. Best, worst case and the middle ground – which might not give you everything you want but is just enough for you to walk away.
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Know when to walk away
In general, it’s not worth pursuing small sums. Far better to take the lesson and get back to business, doing what you do well. However, sometimes it’s worth fighting even if the sums in question are small. For example, if you are a construction business working with a large number of sole traders, and one of them claims they are your employee, it’ll make sense to fight it out to send a clear message to the others. Sometimes it’s not about the sums involved, it’s a strategic play.
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Know your opponent
What kind of a company are they? How large or small? Do they have a legal team? Have they fought/won cases before? How litigious are they? What are they after? What would be a good outcome for them? What is the leadership team like? What’s their financial condition? Will they be able to pay what you seek?
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What if you win?
Winning a dispute can feel triumphant. But implementing the resolution is a whole other thing. For example, even if you win in court and the other party is ordered to pay your costs, you need to ask three questions: (i) can they pay; (ii) will they pay and (iii) how can you ensure they pay? It’s not unusual for a losing party to simply fold their company in order to avoid paying out against an unfavourable judgement. We want you to think about this sort of thing way upfront, before taking the first steps down the path to litigation, before incurring legal fees and spending management time. No one wants a pyrrhic victory.
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What if you lose?
Consider what’s at stake if you lose. Bear in mind that disputes will cost not just your money, but also your time and personal energy. You’ll be preoccupied until it’s done. And not just you but likely your team and your family. What will it mean if you don’t win? Are there steps you can take to shield the business (and your personal life) now? Can you get ahead of it somehow? (Always plan to win yet be prepared to lose).
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Can you flip it?
Businesses have one thing in common. They all want more business. Be creative. Is there a way to flip a potential dispute into an advantage? Look for commercial solutions long before you entertain dispute resolution methods. Can you make an introduction to someone they want to work with? Can you make the contract bigger or longer and in doing so, diminish the dispute altogether? There are lots of ways this can be done, and often, this kind of approach can turn a potential battle into a win-win.
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Pin it on your lawyer
Super important to ask yourself what happens afterwards. What kind of a relationship do you want to have with the other side…on the other side of battle? It helps to have good lawyers around who can do the tough talking, so you don’t have to. Make us your shield and your fall-guys. If we take the heat for the tough lines you draw during the dispute, it can help alleviate awkwardness and leave you with more choices afterwards. So, when the dust settles, you can potentially pick up with other side (if you want to).
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Fake it and you could break it
Lastly, do get legal advice early on. Ideally from people who you know, like and trust and who can bring a business perspective. The right advice at the right time from the right people, will make all the difference.
Written by Twiggy Harding
Co-Founder at My Inhouse Lawyer
One of our values (Growth) is, in many ways, all about cultivating a growth mindset. We are passionate about learning, improving and evolving. We learn from each other, use the best know-how tools in the market and constantly look for ways to simplify. Lawskool is our way of sharing with you. It isn’t intended to be legal advice, rather to enlighten you to make smart business decisions day to day with the benefit of some of our insight. We hope you enjoy the experience. There are some really good ideas and tips coming from some of the best inhouse lawyers. Easy to read and practical. If there’s something you’d like us to write about or some feedback you wish to share, feel free to drop us a note. Equally, if it’s legal advice you’re after, then just give us a call on 0207 939 3959.
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