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Running a business

Resolving business disputes

Resolving business disputes, image of two businesspeople fighting | Crunch

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    Employee issues, non-payments or late payments from customers, conflicts with suppliers, business contracts that go wrong, shareholder disputes and people stealing your intellectual property; these are all the kinds of business disputes that can easily arise. That’s why it is critical you know the best ways to resolve them.

    If you need to resolve a business dispute and you have to go to court, you have three options: small claims track, fast track and multi-track. Let’s see how each one works.

    Small claims track

    The small claims track normally caters for claims of up to £10,000 and not complex matters. It’s a relatively quick and inexpensive procedure. On the small claims track, no costs are awarded to the successful party except court fees, unless there’s been unreasonable conduct by the other party.

    Fast track

    For claims between £10,000 and £25,000, you can use the fast track procedure, which is a bit more expensive and complicated than the small claims path. It normally takes a year to reach trial, but the hearing should be for no longer than a few days.

    Multi-track

    Claims of more than £25,000 are usually allocated to the multi-track. These claims are generally heard in a senior court. There’s no standard procedure for multi-track cases: they can take up to a week depending on the complexity of the case, and it can take between one and two years to reach a hearing.

    Normally the court will help you decide which track to go down when you make your claim.

    Another option for any money you’re owed up to £100,000 is to use money claims online, or MCOL. This  is an alternative way to make a small claim instead of having to issue a civil claim through the county court system.

    Any of the court systems are nonetheless more expensive, time-consuming, and stressful than using Alternative Disputes Resolution.

    What is Alternative Dispute Resolution?

    Alternative Disputes Resolution, also called ADR, includes different ways you can solve a problem without having to go to court.

    There are two main kinds of Dispute Resolution: Mediation and Arbitration.

    Mediation

    Mediation involves the appointment of a neutral, trained mediator to help you try to negotiate a settlement between you and the other party.  

    On the day of the mediation, the Mediator goes from one party to the other trying to broker and outline a settlement that you and the other parties can agree upon. If that happens, the Mediator will help you write down a settlement agreement, and then, you’re done!

    It’s normally a lot cheaper than any of the court procedures and a lot quicker - normally all done and dusted within a day. Any of the court procedures can drag on for some months or even a year. Mediation is generally less stressful because there’s less time involved and you usually reach a resolution on the day.

    Over 70% of Mediations are resolved in a successful outcome on the day of the Mediation.

    You can also say in your contracts that there’s a Mediation procedure that takes effect automatically if there’s a dispute and the courts have to exhaust that before they go to court.

    Arbitration

    Arbitration is a bit different. You need to appoint an Arbitrator to sort your matter out for you. The arbitrator is a decision-maker. They’[re like a judge in that sense.

    Advantage of arbitration

    You can use a sector expert to help you Arbitrate. There are various bodies that govern Arbitrations, like the Central Institute of Arbitration or the London Court of International Arbitration. These bodies will help you appoint an Arbitrator who’s an expert on your particular type of business or industry.

    Arbitration ensures that you can get your batter decided by somebody who definitely knows your kind of business rather than a judge who may be very smart, but may have no experience in your line of enterprise.

    It can be a little bit quicker because it’s not a formal court procedure. The Arbitrator, together with the parties, decides on the rules of evidence, disclosure and so on. It can therefore be a little bit less expensive than court work, although the arbitration fee itself can be quite high.

    What’s the best option?

    The best alternative of all, if you’re engaged in a dispute, is to try to negotiate your way to an outcome. That’s the cheapest, quickest and less stressful way of sorting yourself out.

    Our partner LawBite has lawyers that are able to respond quickly and cost-effectively. LawBite provides quick, affordable and easy-to-understand commercial and corporate legal advice. Their expert lawyers and arbitrators can support your business' needs from helping you learn more about the dispute resolution process in the UK to providing dispute resolution advice.

    They offer Crunch clients free legal consultations to help identify the best ways to protect their business.

    You can book your consultation via our Legal support webpage, or speak to your client managers.

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