If you are currently going through a commercial dispute or need guidance on what to do when a dispute arises, you are in the right place. This recent article outlines everything you need to know about resolving a dispute and pursuing legal action through the court.
Nearly all businesses in this world enter into contracts, whether for mutual gain or to resolve a problem. Typically, this provides security, opportunities, flexibility, and sometimes increased earnings. However, in today’s current climate, they often go wrong due to one of the parties breaking the terms and conditions of the contract. This can have significant negative impacts on businesses leading to loss of profitability, time, and even reputation.
What is commercial dispute resolution?
A commercial dispute is a process that allows aggrieved parties who are engaged in a commercial contract, transaction or deal to resolve their differences through avenues of dispute resolution. The courts consider the process as the final step after communication between the parties has become unrecoverable. The commercial dispute process can take place between companies, individuals, or both.
Typically, disputes can be categorised into 3 sections which include, general commercial disputes, disputes with regulatory authorities regulatory, and commercial contract disputes. The most common types of disputes include:
What steps can be taken to resolve a commercial dispute?
Commercial disputes can escalate very quickly when not addressed correctly. They become costly, time-consuming and stressful for all the parties involved. Therefore, below we have comprised a checklist that individuals can use to attempt to resolve a commercial dispute.
Strategic steps to resolve a commercial dispute:
- Review what was agreed within the contract and how clear the terms were in the agreement.
- Analyse the loss you have incurred due to the disagreement and consider the opposition’s loss they may attempt to claim.
- Collect evidence (e.g., email correspondence, witness statements, contracts, phone calls and forms).
- Attempt to negotiate an amicable resolution to resolve the dispute. Ensure that you document this by keeping duplicate copies of the negotiation form.
- Ensure you follow any alternative dispute resolution processes documented in the contract before pursuing legal action.
- Inform the opposing party that your intent to charge interest on late payments.
- Perform credits checks on the other party to assess if they can pay.
- Seek legal advice unless the dispute is very simple and straightforward.
How to start a commercial dispute resolution claim?
To start a commercial dispute claim, there must be an established basis for a claim. To do this, a company or individual must ensure they can provide evidence that they have exhausted every option possible to resolve the issue. A pre-action protocol may be required that you need to complete in full. However, if this does not apply to your case, it does not need to be enacted. A solicitor will be able to advise you if you need a pre-action protocol.
If a case has a strong standing and the client has informed the relevant professionals, they can complete a claim form and forward it to an appropriate court. However, if the claim is complex, a three-track system may be required to resolve the dispute. A solicitor can guide you on the best route to take when navigating the three-track claim system. The three options available include:
- Small Claims: Claims that have a value of £10k and last for less than a day.
- Fast Track: Claims with a value between £10k-£25k and will last for a day or less.
- Multi-Track: Claims that have a value of £25k or more and will last for more than a day.
After the claim has been selected, the chosen court will deliver an order for direction. This will specify the process regarding how the case will be conducted. Furthermore, this will provide individuals guidance on what documents need to be disclosed, timetables for the trial, due process, and other factors which are specific to the case.
The four stages to commercial dispute resolution?
Commercial dispute resolution uses a strategic process that can be broken down into 4 four steps which include:
When a dispute has reached a point where action is required, it is advised to seek legal advice from a solicitor to ensure you have a strong case. After a solicitor has verified that the case is sufficient, an initial investigation is commenced and supporting evidence is collected. After, a solicitor will complete pre-action tasks such as drafting letters and making formal responses. This process must be completed correctly. Otherwise, it can result in an invalid claim being submitted, which will later be dismissed.
A commercial dispute resolution solicitor will help prepare their client by drafting their clients’ form. This will detail specifics of the case, address the defence and address the potential position that the opposition may take. After, a solicitor will carry out the costing of the case and provide disclosure of the requested documents to the relevant authorities. Furthermore, they will collect witness statements and any other additional evidence to help support the claim. Finally, the case will move to trial, and a final ruling will be made.
Once a trial date has been established, a commercial dispute resolution solicitor will prepare the client’s testimony and ensure that they have a strong argument that can be conveyed comprehensively and coherently. When the trail reaches the designated date, the case will most likely be tried in public by a barrister in the High Court. After, the judge will reach a verdict, and this will be provided in court.
Typically, small claims will be dealt with between three to 6 months. Fast tracks claims can take up to 9 months, whilst multi-track claims can be very complex and hard to dispute.
If you are to win the case, the judgement can be enforced using the following methods:
- Redirection of debt orders
- Placing charge orders
- Insolvency actions
- Property Repossession
Please visit our commercial dispute page for more information on how a solicitor can help with commercial dispute resolution.