Unfortunately, commercial disputes are part of life for many business owners. Issues such as breaches of contract, intellectual property theft and non-payment of invoices can all have a serious impact on your business relationships and reputation, even if they don’t end in litigation.
This month, we help you consider when, as a business owner, you should turn to legal advice if you are faced with a business dispute. We also outline the risks of not seeking early legal advice in such a dispute.
Can I Handle Minor Disputes Myself?
You can resolve some issues, such as the one-off late payment of an invoice, by contacting the other party directly and reminding them of their obligations.
However, you do need to be careful since even straightforward disputes can have sweeping consequences if not handled properly from the outset. For example, you may simply cut ties and terminate your contract with a customer who pays your invoices late. In some cases, however, doing so can amount to a breach of contract, giving the other party the right to sue you. As a result, it’s crucial to properly understand and interpret the terms of any contract between you both before taking any action. Our dispute resolution team can advise you on your position so that you can be certain that nothing you do or say will harm your position.
What are The Risks Associated with Failing to Seek Legal Advice in a Dispute?
It is risky to resolve a dispute without legal support; this may eventually result in more costs than seeking legal advice at the outset. Some of the specific risks include the following:
Failure to Understand Your Position
The law can be complicated, and even legal professionals may not fully comprehend the nuances of a practice area in which they do not specialise. Effective dispute resolution needs expertise in the relevant area of law, such as contract, professional negligence, or intellectual property, as well as a good understanding of the procedural rules surrounding litigation.
Attempting to resolve a dispute without fully understanding your legal position or the court’s expectations of you can jeopardise your claim and leave you in danger of facing adverse costs and liabilities, accidentally doing something that results in you being sued by the other party or having your case struck out by the court.
Our dispute resolution team consists of experts in all areas of commercial law, with experience working with businesses of all sizes to resolve disputes and protect their commercial interests effectively.
Inadvertently Harming Your Situation
Anything you disclose to the other party during the disagreement may be used against you if the matter advances to trial or by the other party to coerce you into settling on unfavourable terms. Taking legal advice early on in a dispute will prevent you from making any inadvertent admissions or saying anything else that harms your position.
In certain situations, you may be able to use the ‘without prejudice’ doctrine to speak openly and look to settle a claim. Any ‘without prejudice’ correspondence cannot be referred to in court later should the settlement fail, meaning that the judge will not be aware of it or swayed by it.
However, there are complexities to this doctrine that go beyond simply marking the correspondence as ‘without prejudice.’ For example, it is also important to take into account the content and context of the correspondence.
A legal advisor will have the experience and expertise to successfully navigate the rules without prejudice to ensure that you can speak openly without risking any concessions being held against you. Getting the without-prejudice rules wrong will be expensive but could also lead to additional litigation involving the parties arguing over whether correspondence marked without prejudice is, in fact, protected from disclosure to the courts.
Failing to Engage in Alternative Dispute Resolution
The courts are keen to encourage settlement negotiations between the parties and will expect them to try and resolve their issues between themselves before they resort to litigation. Failure to do so can result in you being penalised on costs, regardless of the outcome of the case.
There are a series of ‘pre-action protocols’ that govern the conduct of parties to a dispute ahead of issuing court proceedings. These protocols aim to ensure that the parties exchange enough information about their positions early on to allow effective settlement. The court also expects parties to have engaged in ADR methods, such as mediation, at an early stage to try and settle their differences without the need for litigation. These methods often achieve positive results, are less costly and time-consuming than court proceedings and may even allow you to preserve the business relationship.
Engaging a dispute resolution lawyer early on in your dispute ensures that you understand and abide by your duties under the applicable pre-action protocols. They will also advise you on alternate dispute resolution methods appropriate to your case, raise it with the other side at the right time before the parties become too entrenched in their positions and guide you through the process to ensure that you achieve maximum cost protection should your case proceed to court.
How We Can Help
Our team of expert business dispute resolution and litigation solicitors offer cost-effective and practical advice for commercial dispute cases.
Whatever the size of your business, we have the experience and commercial approach you need to resolve your dispute quickly and effectively, thus minimising the impact on your business and saving you time and money in the long run.
For more advice and information, contact Witan Solicitors today on 0300 303 2071 or email us.
