How Do I Decide Which Strategy is Best for My Business in a Dispute?

If your business is in a dispute with another business or you are likely to enter into a dispute, you have a variety of conflict resolution strategies available to you. Choosing the appropriate strategy for your dispute can help both parties reach common ground and settle a dispute. This is important, as it will mean you can avoid expensive court fees and preserve good faith with the other party. This article will explain some strategies you can adopt, when each might be best to use, and what each might involve. 

What is Dispute Resolution?

Dispute resolution is where you resolve a problem with another company. The traditional route for conflict resolution is litigation. This is where you take your case to court, and a judge reaches a conclusion. This process, however, can have many problems and issues. 

As a result, there is also an ‘alternative dispute resolution‘ approach. This includes:

• negotiation;
• mediation; and
• arbitration.

Typically, these options may take less time and help the solution of the conflict meet both parties’ needs. However, this might not always be the best way for your business to approach the conflict. 

Maintaining a Relationship with the Other Company

You may prefer a conflict management approach that helps your business maintain a strong relationship with the other party. In this case, it is a good idea to attempt alternative dispute resolution before litigating. Taking a soft approach that is considerate of the other party’s feelings is a good starting point. To do this, you may wish to start with a simple negotiation.

What is Negotiation?

Negotiations involve you contacting the other party and talking through the conflict before proceeding with anything else. This can either be through written communication or you may wish to organise a face-to-face conversation. You will want to ensure you are sensitive to the other party’s emotions. For example, you can do this by using positive body language. This can be a good way of taking an initial soft approach to the situation. It can also help you diagnose the issues within your business relationships. 

If it is clear that simple negotiation is not going to help you reach common ground or that emotions are high between the two parties, you may wish to opt for mediation instead.

What is Mediation?

Mediation is similar to negotiation but involves a mediator who helps you reach common ground. A mediator is an individual with experience in resolving problems between individuals or businesses. They will talk to both parties to see their views and feelings, then help reach the needs of both parties through a mutually beneficial solution.

This, like negotiation, can be a good option if you are conscious of keeping strong relationships. For example, if your dispute is with a longstanding business partner, mediation can help you solve the problem and keep the route open for future business relationships. 

What is Arbitration?

If negotiation and mediation fail, you may wish to proceed to arbitrate. Arbitration is like litigation. It involves you presenting your case before an independent third person. However, in arbitration, you present to a professional arbitrator rather than a judge. It is also generally a quicker process where you can avoid the courts’ backlog and expensive fees. Importantly, the results of arbitration are kept private and confidential. The rules on presenting evidence are also usually less strict than in litigation. This option can be good for your business if you want to reach a binding and conclusive solution. It can, however, jeopardise future business relationships.

What is Litigation?

Instead of arbitration, you can use litigation if you think it would be good for your specific situation. It is usually a good idea to seek professional legal advice before you decide to litigate.

Remember that you can also use a statutory demand to show the other party that you intend to take them to court. This is usually used where someone has not paid their debts to you. It tells the other party that you are preparing to take them to court. However, sending a statutory demand does not oblige you to take them to court.

Therefore, you can use a statutory demand as a type of threat, showing the other party that you are ready to use force if necessary. This can help you efficiently come to a  solution.

Which Should I Use?

The conflict resolution strategy which is best for your team depends on your specific situation. Some issues you may wish to consider include:

• your goals in the dispute;
• the dispute resolution option that will help you leverage your current position;
• which process will make a solution easiest to achieve;
• each method’s advantages and disadvantages; and
• whether you are likely to succeed if your case goes to court.

These factors can help you decide which strategy is best for your business at any given time.

Key Takeaways

The dispute resolution strategy that is best for your business will depend on your goals and the context of your dispute. You can first opt for alternative dispute resolution techniques, especially if you are conscious of keeping future strong relationships. 

If this does not work, it is a good idea to consider a more aggressive strategy, such as litigation. It is a good idea to seek professional legal advice before deciding to use arbitration or litigation.

If you have any questions about resolving a dispute, our experienced dispute 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 0808 196 8584 or visit our membership page.

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