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When you run a business, making sales, finding customers and growing your reputation are at the forefront of your mind. Managing operations and day-to-day activities will be crucial to providing consistent and excellent goods or services. However, there may be times when a dispute arises, whether with your customer, supplier, manufacturer or employee. Going to court should be a last resort to resolving a commercial dispute. Accordingly, knowing how to handle a dispute and de-escalate the situation is crucial. This article explores three key points your business needs to know about going to court in the UK.
Aim to Avoid the Court System
Going to court in the UK should always be a last resort option. Where possible, you want to work with the other side and their solicitor to find a mutually beneficial compromise. Before escalating matters to court, you should try methods of alternative dispute resolution (ADR), such as:
- adjudication; and
Going to court can be expensive and take time away from operating your business. The cost of being away from your business is critical, as are lawyer fees and damages (monetary compensation) if you lose the case. Additionally, trying to resolve issues informally can be cost-effective. Likewise, resolving a dispute through an ADR method might potentially encourage future commercial dealings with the other side after resolving the issue. However, this is unlikely to be the case after a lengthy court process.
Further, since the court system is public, litigation can also damage your business’ reputation. With ADR processes, meetings are private and remain confidential. Confidentiality can also encourage open communication as you can be reassured the other side cannot use anything you say in ADR against you if the dispute were to escalate to court.
Consider the Appropriate Time for a Court to Step In
If your business has attempted to resolve your dispute through ADR processes, it may be necessary to consider court proceedings. Again, the court system should be a last resort if no other option is successful.
Going to court may be appropriate where:
- the dispute is so significant and concerns a contractual issue which requires litigation; or
- either party is seeking a court-ordered remedy, such as an injunction.
Notably, if you have a contract governing your commercial relationship, review any dispute resolution clauses. It might dictate which ADR process to take or if the dispute reaches a court, which court has the authority to hear it. In particular, a governing law clause will state which law applies to your dispute. This clause is crucial if you are contracting with an international party where conflicting laws will apply.Continue reading this article below the form
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Prepare for Court
Sound preparation could direct the outcome of the court case. The first step is checking the timeframe of the dispute you wish to take to court. Most issues require you to make a claim within a strict time frame. This is known as a limitation period and will differ depending on the type of court claim. If you have passed this period, it is doubtful you can take the business dispute to court.
After you make a claim, the other side (the defendant) typically has a two to four timeframe to respond. After they do, you want to get key documents in order to support your case, including:
- receipts of payments;
- emails; or
Before storming the other side and threatening litigation, it is crucial to be calm and respectful. As the saying goes, anything you say or do can be used against you in court. Sending threatening messages can damage your chances of success. Ultimately, it is best practice to engage a commercial solicitor to assist you throughout the litigation process. Amongst other tasks, they can:
- ensure that you do not miss any deadlines for making claims;
- communicate with the other side on your behalf;
- go through past communications with the other side to build your case; and
- represent you in court.
This guide outlines how to resolve commercial disputes.
Your business may need to take another business court to resolve a dispute. The court system can be daunting, expensive, lengthy and emotional. As such, you should always view courts as a last resort and try to resolve issues informally. You might decide to conduct alternative dispute resolution methods, such as mediation, adjudication or negotiation. If that fails and you escalate your dispute to court, consider timelines for making claims. A qualified solicitor can assist you in making claims and communicating with the other party.
If you need help resolving a business dispute, our experienced disputes 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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