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Litigation and going to Court - 5 ways to help avoid this in the first place

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One of the realities of business life is that disputes will happen, be they with suppliers, contractors, customers or regulators. Whilst litigation and ‘going to court’ may well be your only realistic course of action to resolve business disputes, it can be a costly and time consuming process.  To minimise the need for such legal action in the first place, here are our top 5 business best practice tips suitable for businesses of all sizes.

  1. The devil is in the details - always read the small print
    Whilst it’s important that contracts and agreements between parties are worded correctly, it is vital that you actually read them thoroughly and understand the implications of such agreements, be they a simple order to supply copier paper, or to a complex leasehold agreement. The time taken to read & understand agreements in detail is well worth it, as by the time a dispute arises it is often too late to take remedial action.

  2. Keep calm and carry on
    The litigation process can be stressful and time consuming, and it’s very easy for businesses to lose sight of the big picture and get too embroiled in and affected by the process and the desire to ‘have their day in court’. Remaining calm, objective and professional is vital as there is still a business to be run and maintaining good relationships overall is a key part of this. Before instigating any legal action, take a step back to fully consider the ramifications and knock on effects in an objective and dispassionate manner, and never pursue litigation out of principal – there may well be a better resolution path that could be far less stressful and costly.

  3. Get it in writing
    Having written evidence to back up your position in a business dispute is incredibly important. Whilst it’s great to agree to terms, contracts and agreements in meetings and phone calls, its vital that businesses get into the habit of having such agreements confirmed in writing. Being able to refer back to such written agreements could well be the key to avoiding the need to litigate in the first place, or it will certainly make your legal position in the event of a dispute a lot stronger as a Court Judge will always find such evidence far more compelling than often vague and inconsistent recollections of past conversations and meetings.

  4. Review and check
    There are two main elements businesses should review on a regular basis – their overall terms of business agreements and their processes and procedures that underpin the operation of the business. Terms of business agreements (or ‘TOBA’s) should be reviewed to ensure they fit with current legal requirements and also with any regulatory commitments that may affect your business. One idea could be to add a clause in your TOBA where parties agree to explore mediation (also known as ‘ADR’ – Alternative Dispute Resolution) as a lower cost and quicker alternative to litigation. Keeping your business processes and procedures updated is also important, particularly in the areas of credit control (to avoid bad debt situations either arising or getting to the stage where legal action is required) and customer / supplier relations, to deal with any issues or complaints as early as possible before they potentially escalate.

  5. If in doubt, get advice - and quickly
    If you have explored all your options to resolve a dispute but it’s clear that litigation looks likely, then it’s important that you get professional advice quickly. As well as ensuring that your businesses position is covered, there may be steps that can be taken at an early stage in the legal process that could result in significant time and cost savings further down the line.

If you or your business is involved in a commercial dispute, find out how we can help by calling 0800 160 1298 or by clicking here

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