Disputes are a fact of modern business life. Litigation is sometimes necessary to enforce your rights or to ensure another party meets its obligations. Prevention is usually better than cure, so… here are 10 key New Year ‘Dispute Resolutions’ you can make to help minimise disputes or, if they do arise, maximise your prospects of success:
1. Learn lessons: Think about what’s not gone well for you – or your competitors – in previous transactions. How can you reduce such risks, in entering into and running the relationship, to maximise your prospects of success?
2. Draft carefully: Drafting an effective contract can be a minefield as there are many issues to consider. However, rather than getting bogged down in trying to pack everything into the contract, focus on the essentials. Have you covered off the main points of parties, price, quality, timing, choice of law and jurisdiction?
3. Be clear: Clarity is key to avoiding and managing any disputes. Documents relating to the deal, and subsequent trading (whether contracts, letters, emails or otherwise), will be construed at face value. Accordingly, clear, well thought-out content is less likely to be mis-construed.
4. Know the rules: Ensure that you understand the terms of the contract, what each party has agreed to, key variations and what happens if it goes wrong. Make sure you follow what needs to be done – and that the other party does too.
5. Have a plan: If things start to go wrong, take the time to consider your options, your objectives and the best strategy to achieve this. The earlier you do this, the more options should be available. Once you’ve agreed your strategy, implement it – and keep your plan under regular review as you progress.
6. Put yourself in their shoes: Thinking about the other party’s objectives, needs and concerns should help you get into the best position to successfully resolve matters.
7. Be prepared and proactive: Whether it is doing effective due diligence, having a consistent approach across your case, anticipating the next stage, or having a ‘Plan B’ – being prepared ensures you are forewarned, you can be proactive and take control. You are also less likely to be ambushed.
8. Preserve your evidence: 95% of documents are electronically generated, so it’s a good idea to copy or image key documents and e-mails once a month, to collate a bank of evidence. Ensure crucial correspondence does not go missing through IT malfunctions, automatic overwriting or colleagues leaving the business.
9. Watch what you write: Private discussions or correspondence may have to be disclosed during any dispute, so before you put anything in permanent form, such as an email, text or even voicemail, consider what the other side or a judge would make of the contents.
10. Don’t delay: As with most things, use your common sense to take steps to protect your business and your brand. If you are facing a dispute, then be prepared and take advice early.