In business you can never be sure that you will ever go through life without encountering contractual disputes customers or suppliers, or disagreements within management teams or suppliers.
Solicitors will advise you on areas such as the merits of your case and while this may be encouraging, the other questions you, as the client, need to be asking include:
- What is the likely cost exposure?
- How long could this take?
The thorny issue surrounding costs can be a little bit like asking how long is a piece of string. Clearly, if your dispute is resolved at an early stage then the costs will be far less than if the matter progressed to trial. What often gets over-looked is the hidden cost. How much of a distraction is long-term litigation to you, particularly when you are trying to run your business? The stress and frustration must also play their part, particularly when your solicitor reminds you that nothing is a certainty when court intervention is sought.
In a recent study of 8,500 claims 6 out of every 10 cases were taking over 9 months to proceed from lodging your claim to the first case management hearing. The longest recorded delay was 456 days, while the shortest was a mere 201 days. Some commentary following this research added, “It might take five years, or more, to be paid!” This was in the context of commencing the pre-court protocol to court proceedings if the pre-action negotiations fail. Regardless, can you wait 5 years to get paid or, if you are the defendant, to see the matter concluded?
When drafting this editorial, I stopped and remembered the phrase, “The pen can be mightier than the sword.” Can businesses afford to wield the sword, given what has already been said about ongoing costs etc? The court encourage, “The pen” being Alternative Dispute Resolution (“ADR”) whether that is through without prejudice settlement negotiations or mediation.
ADR usually exposes the views of both parties (I have had it where the parties actually wanted the same thing but that message was lost in litigation) and can lead to a quicker resolution which, in turn, results in the costs overall being lower. It is also probably as important to someone running a business to secure an early resolution as it shortens the time for distraction and constant worry over the ongoing dispute. The price? Well, the price is both parties need to pacify themselves with the settlement reached and accept compromise.
If you require any advice or assistance on mediation or any other insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 or email to firstname.lastname@example.org.
Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.