Common Types of Business Disputes and How a Business Dispute Solicitor Can Resolve Them
Managing a successful business requires maintaining good working relationships, so when a dispute occurs, it’s in everyone’s interest that the conflict is resolved quickly and amicably.
Business dispute solicitors are essential for navigating and resolving conflicts efficiently. Read on to discover why understanding business disputes and resolving them efficiently are essential for any business to thrive.
What are business disputes?
A business dispute is a disagreement between two or more parties involved in a business arrangement and can negatively affect a business’s reputation. Effective commercial dispute resolution can limit the impact on business operations and help firms resume business as usual.
Legal resolution can play an important role in protecting the interests of both business owners and stakeholders. Commercial litigation specialists are primed to manage these kinds of disputes, ensuring legal compliance to mitigate the risks of further issues down the line and minimising any stress and worry during the process.
Reasons for Business disputes
These business disputes can stem from various factors, such as contractual breaches, intellectual property infringement, employment issues, or financial disagreements. Business disputes can significantly impact a company’s reputation, finances, and relationships with clients, suppliers, and partners.
Research indicates that over 50% of businesses experience disputes with other companies or individuals at some point. The most common types of business disputes include contractual disputes, employment disputes, and intellectual property disputes. Resolving these disputes in a timely and cost-effective manner is crucial to minimise the negative impact on the business.
Common types of business disputes
Here, we explore the most common types of business disputes.
Business contract disputes
Disputes involving contracts include incompleteness or errors, misrepresentation of terms, non-performance issues, sub-standard quality and breach of contract.
How a dispute is resolved depends on the type. One of the most common disputes involves goods or service quality being contested by a client. In this case, it’s necessary for any agreement or goods to be checked and for compensation to be offered if the business has fallen short.
Parties are encouraged to try and reach an amicable agreement in the first instance. If this isn’t possible, mediation – where a neutral third party assists in negotiations – is an option. Failing that, specialist legal advice can be sought to resolve commercial disputes effectively and, if necessary, litigation proceedings started.
Partnership and shareholder disputes
Conflict among partners and shareholders is varied but often relates to decision-making or equity distribution. Partnership disputes are typically complex and can have serious consequences for a business and its shareholders if not managed effectively.
If a partnership agreement is in place, this should be scrutinised for any conflict-resolution mechanisms or decision-making tools proposed. In the absence of a formal agreement, the Partnership Act 1890 should be consulted.
Open and honest communication is necessary for negotiation, and mediation is also an option here; failing that, legal advice can be sought to either prevent or pursue commercial litigation proceedings.
Employment-related disputes
Employment-related disputes can cause considerable stress to both employers and employees. These conflicts often involve pay issues, wrongful dismissal discrimination or harassment and should be managed with tact and sensitivity.
Many issues can be rectified through the company’s internal policies and grievance procedures. Direct negotiation can also be effective. However, if no mutual agreement can be reached, mediation, arbitration and employment tribunals are alternative dispute resolution options available.
Intellectual property disputes
Disputes involving intellectual property cover trademarks, patents, copyrights and trade secrets. It’s the responsibility of the owner of the intellectual property to defend it and take action if it’s used without permission.
It is sometimes possible to use someone else’s intellectual property by obtaining permission or buying their rights. However, wrongful use can result in a fine, imprisonment or both.
Negotiation or mediation can sometimes be effective options; however, these dispute types typically require specialist legal advice, as proving the misappropriation of intellectual property can be complex.
Business asset disputes
Disputes over business assets involve the ownership, use or division of company assets.
If no formal agreement is in place (detailing who owns what), then mediation, arbitration or legal intervention may be required to settle the dispute.
How to resolve business disputes
Resolving business disputes is necessary for harmonious working relationships and brand reputation, and there are various ways to resolve conflicts that may arise.
Mediation, arbitration, and alternative dispute resolution
Alternative dispute resolution methods are a cost-effective and quicker way of managing a business dispute.
Mediation involves sitting down with a neutral third party (typically not a legal expert) and trying to reach a mutual agreement. The mediator doesn’t make any decisions but rather guides the conversation.
Arbitration is a private dispute resolution practice and involves both parties submitting their evidence to an arbitrator, who makes a legally binding decision on the matter. This method is a way of avoiding going to court.
Litigation
Business disputes are often complex and require a legal team of specialist solicitors. Commercial law professionals can offer legal advice and, if necessary, practical support, guiding clients through the legal process and providing them with the best possible chance of success.
Settlement negotiations
A settlement agreement is a legally binding contract detailing the terms of ending an employment relationship or resolving a dispute. The agreement has to be adhered to by both parties.
Settlement negotiations often relate to an employee being paid a sum of money to not make (or withdraw) a claim in an employment tribunal. The employer usually want the terms of the agreement to remain confidential, so includes a confidentiality clause.
The benefits of not resorting to formal legal processes are speed and amicability. Business law professionals are experts on commercial dispute matters and can offer advice on a client’s available options and the best way to proceed.
Consulting commercial litigation solicitors
It is typically imperative that an expert solicitor is hired to navigate complex business disputes. They are best placed to gather and check paperwork and ensure that everything is legally watertight.
For expert legal advice on your business dispute options, visit business dispute resolution services.
Commercial Litigation Services
Our commercial litigation solicitors provide a comprehensive range of services to help businesses resolve disputes and protect their interests. With extensive experience in handling complex commercial disputes, including contractual disputes, shareholder disputes, and intellectual property disputes, our team is well-equipped to offer expert legal support.
We understand that commercial disputes can be disruptive and stressful. Our goal is to provide practical solutions that align with your business objectives, ensuring that your interests are safeguarded throughout the dispute resolution process.
Pre-Litigation Steps
Before commencing court proceedings, our commercial litigation solicitors will work with you to explore alternative dispute resolution (ADR) options, such as mediation, arbitration, or negotiation. These pre-litigation steps can help resolve disputes quickly and cost-effectively, while also preserving business relationships.
Our team will provide guidance on the strengths and weaknesses of your case, as well as the potential costs and risks associated with litigation. We will work closely with you to develop a tailored strategy that meets your business needs and objectives, ensuring that you are well-prepared for any eventuality.
Court Proceedings
If court proceedings are necessary, our commercial litigation solicitors will represent you in court and work tirelessly to achieve the best possible outcome. Our team has extensive experience in handling court proceedings, including preparing and filing court documents, conducting witness interviews, and presenting evidence in court.
We understand that court proceedings can be time-consuming and costly, which is why we will work closely with you to manage the process and minimize the disruption to your business. Our goal is to provide you with the best possible representation, ensuring that your interests are protected at every stage of the litigation process.
International Business Disputes
In today’s globalized economy, businesses often operate across multiple jurisdictions, which can increase the risk of international business disputes. Our commercial litigation solicitors have experience in handling international business disputes, including disputes involving foreign companies, contracts, and intellectual property.
We will work closely with you to navigate the complexities of international business disputes, including jurisdictional issues, conflict of laws, and cultural differences. Our team will provide guidance on the best course of action to resolve the dispute, whether through negotiation, mediation, arbitration, or court proceedings.
Our commercial litigation solicitors are committed to providing expert advice and representation to businesses involved in international disputes. We will work tirelessly to protect your interests and achieve the best possible outcome while also minimizing the disruption to your business.
When to seek legal assistance for business disputes
Signs that a business dispute may require legal intervention include:
- Failure of direct negotiation
- One or more parties’ feeling intimidated or pressured
- Mediation failing to achieve a mutual agreement
- Parties are unable to communicate without heightened tension and conflict
- Complexity of legal issues
In any case, it’s advisable to seek professional legal advice in the early stages of a dispute, before the situation escalates, to ensure that all options have been explained, expectations managed and to reduce the risk of further disputes.
Costs and timeframes of resolving business disputes
The cost of resolving business disputes depends on the nature and complexity of the issue, the expected timeframe of resolution, and the legal professional's rates. Therefore, it’s advisable to gather quotations and any personal recommendations before moving forward.
Mediation and arbitration are typically more cost-effective solutions to resolving conflicts (£100–500), as they generally last anything from a day to a few weeks. However, litigation can be lengthy, potentially lasting for many months, and cost far more.
Speaking to a commercial law solicitor and asking for a breakdown of anticipated fees is the best way to gauge costs and budget accordingly. Solicitors may offer a free initial consultation or reduced fees, and some clients will qualify for free legal help, so checking eligibility is important.
Business dispute solicitors are experts in their field and are best placed to offer legal support, whatever the stage someone is at in the process. They can provide reassurance and legal safeguarding and make the process as stress-free and smooth as possible.