Effective Dispute Resolution Methods for Commercial Litigation

What ideas and concerns come to mind when you have a business dispute?
Sometimes the “known unknowns” are the biggest issues – in other words, information is being withheld from you.

Our Approach to Dispute Resolution

The BBS Law approach to commercial litigation is first and foremost outcomes focused, we work with you to resolve the problem.

To achieve this, we will first want to understand two things; “what is the problem and what would you like to achieve”.

The most obvious but important requirement at the outset of our relationship with you is to understand the facts. Not by a quick email – the nuance is often lost. It is important to us that we understand the underlying issues.

Another very important factor in dispute resolution is to understand the other side’s position. What do you think they want and conversely what do you think are they seeking to avoid.

With these parameters in mind, we can begin to work with you to seek to work up a strategy to resolve the dispute.

At BBS Law we will provide you with sensible realistic costs estimates by reference to the various stages of the dispute resolution process.

What are Commercial Disputes?

Business disputes encompass a range of issues. These can be as between commercial third parties such as contract disputes and supplier disputes. These disputes are often focused upon the terms of the contract. This is regardless as to whether the contract is simply verbal or if it is a lengthy document that has been negotiated over a long period and was intended to have covered every eventuality.

They can also be between existing business partners giving rise to a partnership dispute. Alternatively, the business may be run as a company and there is a dispute as between the shareholders.

Often the shareholders are also the directors of the company. However, tensions can arise from several fact sensitive situations. This includes where shareholders vision for the future of the company varies due to an age difference.

Alternatively, where one shareholder sees themselves as not being fairly rewarded. We also see shareholder disputes arising after one shareholder passes away and the surviving spouse is left to negotiate the sale of the shares they have inherited with the remaining majority shareholders.

What is Dispute Resolution?

Dispute resolution is often sub divided into two categories; adjudicative and consensual. The adjudicative approach is a process which is directed towards the dispute being determined either by a Court or sometimes by arbitration. 

The consensual process is a process which is directed towards the dispute being resolved by agreement.

At BBS Law we consider at a strategic level the most effective way to resolve a dispute. This is often achieved by adopting both categories on a parallel track.

Sometimes it is necessary from the very outset to direct the dispute into the Court system. This informs your opponent that you are serious about the problem and your desire to obtain a resolution. By way of example, this may occur when a former business partner has adopted (and continues to adopt) a bullying nature and considers they can simply “wear you down”.

On other occasions, a dispute can be resolved by reaching out at the earliest opportunity to explore some form of alternative dispute resolution. This may be by a formal mediation or negotiating in an exchange of correspondence.

More often than not, the adjudicative and consensual approach are used at the same time in parallel. 

Should I go to Court or Negotiate?

In the adjudicated approach, the Court will direct the parties to set out their case in a clear particularised manner and then to give disclosure of documents that are central to the issues in dispute.

It is at these stages that it is key you are advised by solicitors who are experienced in the obligations and duties in complying with the Court directions that will take the case to trial. The process can be very effective in ensuring that the central documents to a commercial dispute are disclosed whether the party holding them likes it or not.  

The advantages of reaching a negotiated settlement can be particularly attractive in the context of shareholder disputes. Often these involve parties who are family or who were friends for many years and the business / personal relationship is intertwined. It is for this reason they are often referred to as “corporate divorce”.

If the dispute is determined by a Court, the parties can only answer the questions they are asked. More fundamentally, the judge will often only determine a few precise issues – should the shares be bought or sold, at what price. Until the judge decides the parties have uncertainty.

If the dispute is resolved by a negotiated settlement, sometimes very sensitive immotive issues can be aired.

Furthermore, assuming the parties agree, they can be as creative as they and their advisors allow. This includes structuring an agreement in a manner that is tax efficient for everyone. Very often this can be the key to cutting to the gordian knot in unravelling a claim for unfair prejudice when one party is demanding their shares be bought by the majority shareholder.

Another key advantage of the consensual process in dispute resolution is the opportunity to keep the issues confidential to the parties. If the dispute goes to trial the judgement becomes a public document.

Obviously, confidentiality can be a very attractive component to any commercial dispute, be it with a contract dispute or a shareholders / director’s dispute.

The other advantage to mediation of a commercial dispute is being in control of the timetable. A shareholder dispute will often take around eighteen months to reach trial from the date that proceedings are issued. Once the trial has completed it can still take several months before judgement is handed down. 

In summary, if nothing else, this article should convince you that an experienced dispute resolution litigator can add great value in assisting you in resolving a commercial dispute.

Frequently Asked Questions

What Are the Methods of Solving Commercial Disputes?

There are a range of traditional methods that business dispute solicitors use day in day out. These are the likes of negotiation, mediations, arbitration and litigation.

But what do these actually mean?

Negotiating is the process in which both parties discuss and negotiate a preferable outcome for them both.

Mediation is arguably similar, however the discussions between parties take place with the help of a neutral party also known as the mediator. On the other end of the spectrum there is arbitration which involves the addition of a neutral third party that makes a binding decision; finally, there is litigation which is the resolution of issues that takes place in court.

What Is the Difference Between Commercial and Business Litigation?

While they sound and somewhat are similar there are some things that differentiate the two. Commercial litigation refers to the likes of a company dispute between two businesses or those that involve contract disputes and debt collection.

However on the other hand, there is business litigation which is a more holistic term that involves commercial matters as well as the likes of shareholder or employment disputes.