Starting or running a business can be highly rewarding, but commercial disputes are a common headache that businesses may suffer. These disputes may arise for several reasons, from disagreements regarding contractual terms, intellectual property rights, or any other aspect of business dealings. Such disputes can disrupt operations, strain relationships, and impact a business’s bottom line. Understanding how to manage and resolve commercial disputes effectively is essential for businesses aiming to mitigate risks and protect their interests.

In this blog post, our commercial dispute resolution team aims to provide some answers to frequently asked questions about commercial disputes and litigation. And, if you require dispute resolution assistance, our highly experienced team is always available to help dull the pain of commercial disputes and make the resolution process a little less daunting.

What are commercial disputes, and how common are they?

Commercial disputes refer to any disagreement or conflict that may arise during business dealings. These can range from contractual disputes to disagreements over intellectual property rights. Commercial disputes can also include internal matters, such as employment disputes or disputes between shareholders or directors. Unfortunately, they are a prevalent aspect of commercial life in businesses of all sizes and industries.

Why is it important to address commercial disputes promptly?

Addressing commercial disputes as quickly as possible is crucial because the fallout of unresolved or lingering disputes can significantly impact a business’s success or failure. By seeking advice early on, business owners can manage and resolve matters before they escalate, potentially saving time and money and preserving crucial commercial relationships.

What are some methods for resolving commercial disputes?

Alternative dispute resolution (ADR) methods, such as mediation, arbitration, and informal negotiation, provide effective means for resolving commercial disputes outside of the courtroom. These methods often lead to more amicable and cost-effective solutions when compared to traditional litigation. Negotiation, or pre-action discussions or without-prejudice discussions, is typically the most cost-effective ADR method. These initial discussions or negotiations can be done without legal representation. However, it is advisable to seek specialist advice or representation from a dispute resolution solicitor to protect your legal rights, particularly when the other party has legal representation, or contracts are involved. Most commercial contracts have a dispute resolution clause specifying how disputes must be dealt with, and these directives must be considered. If negotiations are unsuccessful or unsuitable for the situation, mediation is often the next preferred route (unless another method is specified in the contract). Mediation is less formal than arbitration or litigation and can be the next most cost-effective method. It also allows the parties to agree on terms that a court or arbitrator cannot do in an arbitral award or court judgment.

Is mediation compulsory?

Mediation is likely to become compulsory later this year (2024) for certain civil claims valued at up to £10,000 – with parties facing cost sanctions or a strike-out if they fail to engage in the mediation process. This new step in the court process follows a consultation that the Ministry of Justice (MoJ) commenced in 2022, with backing from the government announced last year. The MoJ made it clear that any agreement to a settlement at mediation will remain voluntary and that all parties who need a hearing before a judge to resolve their dispute will be able to have one.

Although these obligations are not currently established, it is still essential for parties to consider alternative dispute resolution (ADR) methods. For a long time, the UK Legal system has encouraged parties to pursue ADR rather than litigation. Parties who have not attempted to resolve their dispute outside of the litigation process may be viewed unfavourably by the courts. If a contract includes a provision for mediation or arbitration to settle a dispute, the party that disregards this will likely face criticism from a court, which may lead to financial consequences.

Our commercial litigation team and dispute resolution specialists can help assess your case, review any contract terms involved in your dispute, and provide guidance and assistance on the best way forward.

When is litigation necessary to resolve commercial disputes?

Litigation becomes necessary when disputes cannot be resolved through ADR methods or informal negotiations. Because of the individuals and time involved in litigation (Solicitors, Barristers, Courts, Experts and Judges), litigation can become lengthy, very expensive and may damage ongoing commercial relationships. Consequently, this is why aiming for a resolution pre-court is so favourable. However, litigation may be the only or most effective way to protect your rights and interests in certain situations. When a matter goes to court (is litigated), you and your dispute resolution Solicitor will need to follow a set of rules, processes and timelines applied by the courts. The litigation process often includes complex requirements, and it is often the best route to seek specialist advice and assistance, especially in complex or high-value disputes.

Can I represent myself in court proceedings?

Individuals can represent themselves in court and are typically expected to do so for small claims cases. However, for cases that are of high value or more complex, it is advisable to seek the assistance of a dispute resolution solicitor. This ensures that legal issues and court procedures are handled correctly with proper representation. Even if a case goes to court, resolving disputes before a final hearing is possible. Therefore, robust legal support throughout the process is crucial to achieving a positive outcome.

How can expert legal advice help in commercial disputes?

Seeking expert legal advice is crucial when facing commercial disputes. Experienced lawyers with expertise in commercial litigation and ADR processes can provide constructive and tailored solutions to address your specific needs. These lawyers possess in-depth knowledge of commercial legal issues and disputes and will likely specialise in certain areas of law, such as employment law, professional negligence, or insolvency. They can navigate complex legal frameworks, advocate for your rights, and work towards achieving the best possible outcome for your business.

Why choose our firm for commercial dispute resolution?

At Gordons, our specialist commercial dispute resolution team understands the nuances of commercial disputes and strives to provide clients with effective and efficient solutions. Whether through ADR or litigation, we are committed to resolving disputes effectively, even in the most challenging circumstances.

Our commercial dispute experts offer comprehensive assistance in various areas of commercial and property litigation, including:

  • Aviation Disputes: Handling disputes related to aviation matters.
  • Bankruptcy and Insolvency: Assisting with issues pertaining to bankruptcy and insolvency.
  • Company Restoration: Supporting clients in restoring companies to the register.
  • Corporate and Shareholder Disputes: Resolving conflicts among corporate entities and shareholders.
  • Debt Collection: Managing debt collection on both personal and commercial levels.
  • Distribution Disputes: Addressing disputes arising from distribution agreements.
  • Enforcement of Judgments: Ensuring the enforcement of court judgments.
  • General Commercial Disputes: Handling a wide range of commercial disputes.
  • International Trade and Commodities Disputes: Resolving disputes related to international trade and commodities.
  • Lease Extensions and Leasehold Enfranchisement: Assisting with lease extensions and leasehold enfranchisement matters.
  • Property Disputes: Offering comprehensive support for various property-related disputes, including breach of covenant claims, construction disputes, and disputes arising from contracts for the sale and purchase of land.
  • Professional Negligence: Addressing cases of professional negligence.
  • Supply of Goods and Services Disputes: Handling disputes related to the supply of goods and services, including those governed by the Consumer Rights Act 2015 and the Sale of Goods Act 1979.

To speak to a solicitor about Commercial Disputes or Alternative Dispute Resolution, please contact the Commercial Litigation team at Gordons Partnership today. You can call us on 01483 451 900 (Guildford) or 020 7421 9421 (London). Alternatively, please email sols@gordonsols.co.uk.

This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact a member of our team.