FEATURE


LEGAL SERVICES Commercial disputes:


choosing the right path


By Rob Stubbs, Dispute Resolution Solicitor at Banner Jones


While all companies – and no doubt the individuals tasked with their day-to-day running – aim to resolve any commercial dispute amicably, there are occasions where conflict is simply unavoidable. For most of us, it isn’t a case of if, more a matter of when. Once we come to accept this particular business-related inevitability, it is important to focus one’s energy on how to set about managing said disputes. Historically, any form of disagreement was typically


resolved via formal litigation, and there is no denying that this tactic does still have its advantages. Take, for example, situations in which a party has a very strong case and its opponent has no reasonable grounds for dispute, or if the opponent simply will not cooperate in an attempt to resolve the disagreement. Under such circumstances, court proceedings may be


required to break the impasse and parties may consider tactics such as ‘seeking swift summary judgment’, or ‘strike out’, to conclude the matter as quickly as possible. However, while the court room can still provide an


effective forum to settle disputes, it can be a high risk strategy that some would prefer to avoid – not to mention an unwelcome distraction from a party’s commercial objectives. Add into the mix escalating litigation costs and it is easy to see why there has been an increased emphasis on Alternative Dispute Resolution (ADR) in recent years. It is a method that has proved, in many a case, to be


equally as effective and considerably cheaper, with speed, flexibility and confidentiality also attractive attributes. In fact, so well recognised and respected is this


approach, that a party that unreasonably refuses ADR may be penalised in relation to costs at the conclusion of court proceedings. The main forms of ADR include: negotiation, mediation,


arbitration and expert determination, which are no doubt all familiar terms to those of us who have tried to manage a conflict or dispute over the years. Negotiation is perhaps the most recognisable term, an


approach that has been used in order to resolve disputes since time immemorial. One key benefit is that it can take place via various mediums – including written correspondence, telephone or at a face-to-face meeting where need be. Mediation, which comprises negotiation assisted by a


neutral third party, is perhaps the most common form of formal ADR given that it enables parties to attempt to reach a negotiated settlement, which is consensual rather than imposed. Often less adversarial in nature than formal litigation, it can also assist businesses in preserving valuable commercial relationships. But that does not mean it is a perfect method of


resolving a commercial dispute, given that a resolution cannot be unilaterally imposed. As a result, if all parties cannot achieve a settlement, mediation can simply serve to


32 business network April 2017 Workplace conflict can’t always be avoided so it’s important to take the right approach


increase costs, and while it is comparatively cheaper than formal litigation, costs can still be relatively substantial, so identifying those cases in which mediation is likely to be effective in advance is essential. If the dispute is of a technical nature, expert


determination can provide the parties with a technically experienced third party to consider the merits of their respective cases and to deliver a decision. Similarly, arbitration, which also involves determination by a third party, is often suitable for resolving commercial disputes where those involved cannot agree. Indeed certain commercial contracts may contain an


‘arbitration clause’ requiring the parties to arbitrate in the event of dispute in which it is pre-agreed that the arbitrator’s decision is to be legally binding to ensure that there is finality. Come what may, navigating commercial disputes can be


daunting and costly, and so selecting the right method of resolution in each case is crucial. Consequently, businesses faced with a dispute should give careful consideration to the path they choose to take and seek professional advice before making a decision.


‘Mediation, which comprises negotiation assisted by a neutral third party, is perhaps the most common form of formal ADR’


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