Opponents are playing tough, daring businesses to issue court proceedings and risk substantial court fees, meaning many disputes that have a good chance of winning are going unheard. But, with the right support, you can do better than just chalk it down to experience as lawyer Gemma Carson outlines.
So how do you put things right when a trade dispute escalates? Commercial litigation lawyer Gemma Carson of Wright Hassall explains how to get on the right track to resolution.
1. Get documenting
It sounds obvious, but do you do include a clear dispute resolution clause in all your business contracts? You should - it can really help you should a dispute arise. It enables you to outline each stage of the process as each party’s obligations increase. A lawyer can check the wording of contracts to help prevent confusion at a later date.
Whether or not you have clauses in place, be sure to keep records of key details such as product or service details, warranties, leases, agreements, along with dates and times of any correspondence that takes place between you and your customer. This may be referred to if a claim is brought and could possibly be used as evidence to help support your case.
2. Keep calm
Remember to remain objective throughout a business disagreement, avoiding the use of any offensive or abusive language in communications that could provoke further conflict or be used against you at a later stage in the process.
Staying calm and professional can help negotiations run smoother and is more likely to secure a quick resolution, without the matter escalating.
3. Be clear
Minor disagreements can be handled over the phone, whilst more complex issues may require face-to-face discussion. Either way, make sure you listen carefully to the aggrieved party and respond clearly so there is no possible way they can misconstrue your perspective or intentions.
If required, instruct a law firm that is willing to attend business meetings, review contentious correspondence before it is sent out, and be a professional sounding-board to test strategies.
All of these services can be ‘behind the scenes’ from your opponent’s point of view, so the lawyers’ involvement need not exacerbate any existing tension.
4. Think creatively
Compile a list of possible, yet realistic, solutions that you can put forward for discussion in negotiations. If you contact a law firm early in the process, it should be creative in its approach to problem-solving, considering all practical options available to assess if a resolution can be reached without the need to go to court. That should be the last resort.
5. Establish your position
Can the dispute be resolved without the need to start court proceedings? If not, and your business has a claim against an opponent with the means to pay, law firms with specialist commercial dispute resolution expertise - and more importantly, funding prowess - will find a funding solution for the case to get it off the shelf and its value realised.
Your claim may fall at the first hurdle if you’re uncertain about the impact it will have on your business and finances, even if it does have good legal prospects. So, be sure that your case contains all the elements required to establish a legal claim before you proceed further.
6. Find the right law firm
Lawyers that specialise in litigation not only have expertise in the court process, they are specialist negotiators and problem solvers - their early input in a business disagreement will often deliver a resolution more quickly.
In terms of funding the dispute, the right law firm should be well versed in the range of funding products available to you and will distil the wealth of information into easy to understand options. It should focus on what the outcome may look like for you - with and without funding -so that informed decisions can be made as to your best option. Achieving a financial benefit for the claimant client should be the law firm’s primary concern, not just winning the case at trial and disregarding how the costs incurred impact you.
7. Get to grips with funding
The funding solution must be transparent and easy to understand. Conditional fee arrangements, backed by insurance, can be better understood if they are explained to you in terms of the likely overall financial outcome if the case is won or lost.
There are various costs claimants will need to consider, with different products available to address each one. Details on the various funding options are available from most law firms, but in brief, the costs are:
- Your lawyer’s costs. One option is to enter into a conditional fee agreement, where some or all of the costs are only payable if you are successful and your lawyer shares at least some of the risk with you. Alternatively, your own costs may be met by an existing insurance, like business or home cover. There are also third-party funders who, in return for a fee, will invest in claims to enable them to be brought.
- Your expenses - also known as ‘disbursements’. These include court fees, barristers’ fees and experts’ fees. Again, you may have existing insurance that covers these. Otherwise ‘after-the-event’ (ATE) insurance can sometimes be obtained to meet these costs, or a third-party funder may cover them.
- Your opponent’s costs and expenses. If your claim is unsuccessful you are likely to be ordered to pay at least some of your opponent’s costs. Again, insurance or the investment of a third-party funder can be used to meet these costs.
8. Weigh up the costs, risks and benefits
Remember, funding is not free. Where the payment of costs depends on a successful outcome, there will of course be more to pay if you are successful, to balance the risk of that fee being lost.
A third-party funder will charge a fee, which is usually calculated as a percentage of the damages awarded or the monies invested. After-the-event insurance will attract a premium, however, these costs can sometimes be deferred until conclusion of the case to assist the claimant in meeting these liabilities.
Funding enables you to run claims you otherwise would not wish to fund - either due to lack of available funds or because you do not wish to divert valuable cash from the business.
Whilst there is a cost to funding, the benefit is being able to hedge the risk and limit it. Those of you that use funding products may receive less of your claim overall, but it enables you to limit the potential liability you would otherwise be exposed to should you lose.