Do I Need a Lawyer During a Commercial Dispute?

You will likely deal with a commercial dispute at some point over the course of your business’s life. This can be a stressful and challenging situation. At the same time, hiring a lawyer can also be a daunting experience, not least because of the very high costs of getting one. This article will discuss some of the avenues available to you when dealing with a dispute. It will also explain when it is best to start considering hiring a lawyer. 

What is a Commercial Dispute?

The term ‘disputes’ has a more technical meaning within the legal sector than just a disagreement. Usually, it is a problem that involves a breach of legal rights. If you find yourself in the midst of a dispute, you will have a variety of legal options available to you.

Types of Commercial Dispute Resolution

The options available to you to resolve your dispute will depend on the nature of your dispute.

A majority of commercial disputes are contractual. This can be a contract between you and a customer, a supplier, or other business owners. If you have a contract with the other party to the dispute, the first thing to do is to check your contract. 

If there is a term in your contract which outlines what will happen in the case of commercial disputes, then you will normally be obliged to comply with it. A common example is an arbitration clause. 

If there is no term, then you have the freedom to choose between a variety of dispute resolution methods. This includes typical court proceedings (referred to as litigation), as well as alternative dispute resolution methods, such as:

• negotiation;
• mediation; or
• arbitration.

Whether you need a lawyer or not will depend on the approach you are taking and your goals and objectives in the dispute. 

Negotiation

If you are in a commercial dispute, it is always a good idea to start by negotiating with the other party. This will not require a solicitor. However, it is a good idea to be receptive to the other parties’ concerns so as not to inflame the situation. 

Negotiating with small businesses can be a less formal procedure where you are in direct contact with business owners. Doing so can sometimes be good for solving any problems. Similarly, if you are solving a dispute with clients, you should also start by getting into contact with them and talking things through.

Mediation

If the dispute is more complex and there are significant disagreements on both sides, then you may wish to enter mediation proceedings. Mediation is similar to negotiation. However, mediation involves a professional mediator who has expertise in helping parties come to a mutually agreeable settlement to their dispute. 

This will also not necessarily require you to hire a solicitor. However, you may wish to seek legal advice in some shape or form if you think it would be helpful for the terms of your settlement agreement. The settlement agreement is how a mediation process is resolved, and the agreement is usually a binding contract. 

Arbitration and Litigation

If mediation and negotiation have not worked, you may wish to begin more formal proceedings. 

Arbitration is a form of alternative dispute resolution, where your case is heard before an independent arbitrator. Litigation, on the other hand, is a form of dispute resolution where your case goes to court and is heard before a judge. 

Some key differences separate arbitration and litigation. For example, arbitration is usually a quicker, more private, and more cost effective way of resolving a dispute than litigation. At the same time, however, an arbitration award usually cannot be contested, whereas a court judgement can. 

If you choose to use either arbitration or litigation, you will need to hire lawyers. Commercial litigation solicitors and barristers will usually be necessary in any case. 

How Do Lawyers Charge for a Commercial Dispute?

Law firms operate with different fee structures for their clients. Most lawyers will charge for their time on an hourly basis. This will mean that you pay for all of the time that they spend on your matter, including:

• phone calls;
• meetings;
• reviewing your documents; and
• drafting documents on your behalf for court.

If you are hiring a lawyer that charges on an hourly basis, you should request an estimate of the cost for their service.

On the other hand, some lawyers charge on a fixed-fee basis. This means that you will have a more certain idea as to costs from the beginning, rather than an estimate. In any case, it is a good idea to check how the lawyers you are hiring will charge, as well as getting any estimates.

Finally, it is worth keeping in mind that if your case goes to court and you win, the other party may be obliged to pay your legal costs. Similarly, if you lose in court, you may be obliged to pay the other parties’ costs. 

Key Takeaways

Whether you need a lawyer to help you with your commercial dispute will depend on the type of dispute resolution method that you would like to adopt. Lawyers are most necessary if you are using arbitration or litigation as a way of resolving your dispute. Otherwise, you can deal with issues on your own unless you think that specific legal advice or expertise would be helpful, for example, for negotiating the terms of a settlement. Finally, it is worth keeping in mind the way in which lawyers will charge for their services. If your lawyers ask for fees on an hourly basis, it is important that you ask for an estimate as to costs from the beginning.

If you need help a commercial dispute, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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