Resolving commercial disputes.[check] This checklist advises on how to resolve commercial disputes, whatever the size of organisation you work in, by selecting and applying the best method to effectively resolve disagreements between businesses. This checklist is designed as an overview of the main techniques for dispute resolution, and does not constitute legal advice. If you are involved in a commercial dispute, you should seek legal guidance. Definition A commercial dispute is any disagreement between two businesses, usually regarding a contract (a legally binding agreement). Although the agreement is normally oral or in writing, contracts can also exist when nothing has been said or written by the parties to it: these are implied contracts implied contract n. an agreement which is found to exist based on the circumstances when to deny a contract would be unfair and/or result in unjust enrichment to one of the parties. An implied contract is distinguished from an "express contract. . Other types of commercial dispute not covered not covered Health care adjective Referring to a procedure, test or other health service to which a policy holder or insurance beneficiary is not entitled under the terms of the policy or payment system–eg, Medicare. Cf Covered. by contracts include libel libel 1) n. to publish in print (including pictures), writing or broadcast through radio, television or film, an untruth about another which will do harm to that person or his/her reputation, by tending to bring the target into ridicule, hatred, scorn or contempt of against a business (excludes employment law issues and Employment Tribunals Employment Tribunals are inferior courts in Great Britain which have statutory jurisdiction to hear many kinds of disputes between employers and employees. The most common disputes being concerned with unfair dismissal and discrimination. ). There are three main types of dispute resolution currently in use: * Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. * Arbitration/Expert Determination * Alternative Dispute Resolution Procedures for settling disputes by means other than litigation; e.g., by Arbitration, mediation, or minitrials. Such procedures, which are usually less costly and more expeditious than litigation, are increasingly being used in commercial and labor disputes, Divorce (ADR ADR - Astra Digital Radio ). This checklist will examine all three methods. Advantages of resolving commercial disputes Resolving a commercial dispute provides an opportunity to: * remedy an unwanted commercial situation * present your side of the argument * remedy an injustice Injustice American concentration camps 110,000 Japanese-Americans incarcerated during WWII. [Am. Hist.: Van Doren, 487] Bassianus murdered after being falsely accused. [Br. Lit. * learn lessons about the way your business is run * appear strong, principled prin·ci·pled adj. Based on, marked by, or manifesting principle: a principled decision; a highly principled person. and magnanimous mag·nan·i·mous adj. 1. Courageously noble in mind and heart. 2. Generous in forgiving; eschewing resentment or revenge; unselfish. . Disadvantages of resolving commercial disputes There are few drawbacks to actually resolving disputes, but during the process some or all of the following problems might arise: * financial expense * increased stress and pressure * senior executives' time being taken up by the dispute * bad publicity. Action checklist 1. Discuss the situation with your legal advisers It is important that you speak with your legal advisers as soon it becomes clear that a disagreement is serious. They can provide practical, objective advice on actions or strategies that may be difficult to identify for those closely involved in the situation, and can ensure that mistakes are not made that could weaken your position in the future. One particular reason for getting early legal advice is that if you wish to make a claim in the English courts there are time limits within which certain claims must be brought. Legal advice can be expensive, but it tends to be cheaper earlier on in the process--and an hour's advice at the start can potentially save much more in the future. 2. Attempt to resolve the situation amicably am·i·ca·ble adj. Characterized by or exhibiting friendliness or goodwill; friendly. [Middle English, from Late Latin am and 'without prejudice' Depending on your legal advice, it may be worth trying one last attempt at resolving the situation amicably, but it is important to remember the 'without prejudice' rule when negotiating to resolve a dispute. This means that offers or admissions made in these negotiations cannot subsequently be revealed to the court, enabling the parties to make an honest attempt at reaching a sensible compromise. It is common when negotiating in these circumstances to put a heading of 'without prejudice' on all correspondence. Once an agreement has been reached the terms are usually confirmed in correspondence which does not have a heading of 'without prejudice', creating a binding agreement which can be revealed to the court. 3. Gather the facts and documentation Ensure that all the relevant information and correspondence are available, as they may be required if you go to court. This will help in briefing your advisers, and will highlight the strength of your position, showing what solution is reasonable and possibly even affecting the method you choose for resolving the dispute. 4. Review your options and consider the implications The following background information is useful in understanding which of the three main options is appropriate to resolving your dispute. Litigation This is when a dispute is resolved in court. It is important to know where the dispute will be heard. In England and Wales England and Wales are both constituent countries of the United Kingdom, that together share a single legal system: English law. Legislatively, England and Wales are treated as a single unit (see State (law)) for the conflict of laws. commercial litigation will normally be heard in one of two courts: the County Court or the High Court. The following general rules apply for the County Court: * Where a claim does not exceed 5,000 [pounds sterling], such as a small unpaid debt, this is processed through the 'small claims' procedure. * Claims for less than 25,000 [pounds sterling] are almost always tried in the County Court, and claims for up to 100,000 [pounds sterling] are generally heard in the County Court. Litigation has the following key features: * It is long and complex. It has the advantage of being thorough, with checks and balances throughout (including the right of appeal), but it is also time-consuming (taking months, possibly years) and, as a result, expensive. * Litigation in England involves a procedure known as 'discovery'. This means that each party has to serve on the other a list of all documents relevant to the action that they possess (or have had in their possession). Seven days after exchanging lists each party can inspect the other side's documents. * Before trial there are a number of other stages where the pleadings--claims and counterclaims--are served, where the Summons summons: see procedure. summons In law, written notification that one is required to appear in court. In civil (noncriminal) cases, it notifies a defendant that he or she must appear and defend (e.g. is served, and where evidence is exchanged. * Generally there are two ways of avoiding a trial. The first is by obtaining a judgement prior to the full trial--if, for example, the defendant fails within the 14 day time limit to acknowledge the service form from the court; or if the plaintiff's case is so strong that it is apparent there is no defence, in which case they may obtain a 'summary judgement'. The second is by settling out of court (see point 6). Arbitration/Expert Determination Arbitration allows the parties in a dispute to have it resolved by a private tribunal of their own choosing, rather than by the courts. Many contracts have standard clauses that allow for arbitration in the case of disputes and it is a useful option. Key features are: * Parties take part in arbitration only by agreement. * The right of appeal from arbitrators' awards is limited. Arbitration in England is respected by the courts (and reinforced by the 1996 Arbitration Act), so that an award by an arbitrator arbitrator n. one who conducts an arbitration, and serves as a judge who conducts a "mini-trial," somewhat less formally than a court trial. In most cases the arbitraror is an attorney, either alone or as part of a panel. in the vast majority of cases is not then subject to litigation in the courts. * Arbitrators must be qualified to act in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with both English law The system of law that has developed in England from approximately 1066 to the present. The body of English law includes legislation, Common Law, and a host of other legal norms established by Parliament, the Crown, and the judiciary. and the arbitration agreement (a commercial court judge can act as an arbitrator). English law assumes that only one arbitrator will be used (although some agreements refer to two). * Arbitrators have rights and obligations, including a duty to act impartially im·par·tial adj. Not partial or biased; unprejudiced. See Synonyms at fair1. im  par·ti·al . They cannot, for example, refuse to hear one party or
receive information without the other party being present or informed.
* The procedure used during arbitration depends on the nature of the dispute and the practice normally used in the industry or for that type of dispute. Expert determination is similar to arbitration. Under this system the parties to a dispute appoint a technical expert to decide the point of conflict that has arisen. The advantages are that it is much quicker and cheaper than other methods, and it is flexible and simple. The disadvantages are that it is only feasible in certain disputes, there are no pleadings pleadings: see procedure. or hearings--so the parties have much less control--and there are almost no rights of appeal. Alternative Dispute Resolution (ADR) There are many different methods of ADR, including mediation mediation, in law, type of intervention in which the disputing parties accept the offer of a third party to recommend a solution for their controversy. Mediation has long been a part of international law, frequently involving the use of an international commission, (the most common), executive tribunal and mini trial. With ADR, a neutral third party does not decide the case but instead provides a structure to negotiations, helping the parties to discuss the case, clarify the issues, explore areas of agreement and gradually promote a compromise. Other key features are: * Most forms of ADR are quickly arranged. * The parties' rights to litigate or arbitrate as usual are preserved. * Even when ADR does not work completely it can help clarify the most heavily disputed issue, which may then be the subject of a formal hearing. * It is flexible. Unlike the two other methods where the objective is for the judge or arbitrator to apply the law and impose a decision, ADR also allows the neutral mediator mediator n. a person who conducts mediation. A mediator is usually a lawyer, or retired judge, but can be a non-attorney specialist in the subject matter (like child custody) who tries to bring people and their disputes to early resolution through a conference. to accommodate the parties' commercial and other legitimate interests. This process recognises, for example, that the parties may wish to continue trading with each other. 5. Assemble your team A core team needs to handle the dispute. The exact composition depends on the size and nature of the dispute, but the team will usually include some or all of the following people: the chief executive; representatives from the legal and finance departments; an external lawyer; a manager with detailed knowledge of the dispute; specialists and expert witnesses; PR and communications personnel in the event of media interest; and administrative backup. 6. Prepare for action and consider settling out of court * Review the case and check your information. * If you are negotiating (rather than litigating), then clearly define your position--where you will compromise and where you will not. * Consider settling out of court. Because of the time and costs involved many businesses frequently agree on a compromise, even when advised that they are likely to win the action. The most common way in which a settlement is reached is through negotiation. This can take place directly between the parties, between their lawyers, or between the parties and their lawyers. 7. Settle the dispute and confirm the outcome Once action is under way it is important to remain patient, keeping in mind your final objective, and you will also need to be flexible. Once an agreement has been reached, confirm it in writing and, if possible, make it binding, otherwise a change of heart or personnel after an agreement can cause the whole dispute to open up again in the future. 8. Review the dispute and learn the lessons Following a commercial dispute there may well be a number of lessons for the business to learn. It is probably worth reviewing general issues, such as the type of standard clauses contained in your agreements or your terms of business, as well as specific points resulting from the dispute. Senior managers should also establish a procedure for referring potential problems at an early stage. Dos and don'ts for resolving commercial disputes Do * Consult with legal advisers at the earliest opportunity. * Keep track of costs--they can escalate es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. quickly. * Take control--the whole process of resolving a commercial dispute needs to be managed across different departments. Don't * Delay--the sooner you recognise a dispute and decide what course of action to take, the more likely it will be to succeed. * Destroy or cover up information--it causes many more problems than it solves. Useful; reading Books Tolley's commercial contracts: a practical guide to standard terms Richard Lawson
Richard Lawson (born Rickey Lee Lawson on March 7, 1947 in Loma Linda, California, U.S. and Susan Singleton sin·gle·ton n. An offspring born alone. singleton Medtalk One baby. Cf Triplet, Twin. Croydon: Butterworth Tolley, 2003 Journal articles The go between, Alexander Garrett Management Today, May, 2004, pp54-57 Useful addresses Centre for Effective Dispute Resolution Centre for Effective Dispute Resolution (CEDR) is a London-based mediation and alternative dispute resolution body. It was founded as a non-profit organisation in 1990, with the support of The Confederation of British Industry (CBI) and a number of British businesses and law firms, Exchange Tower, Harbour Exchange Square, London E14 9GB Tel: 020 7536 6000 www.cedr.co.uk Chartered Institute of Arbitrators The Chartered Institute of Arbitrators is a London based membership organisation for arbitrators for the promotion and facilitation of dispute resolution. Historically, the Institute has focused primarily upon arbitration, but since the 1990s, it has taken a greater role in International Arbitration International arbitration is the established method today for resolving disputes between parties to international commercial agreements. As with arbitration generally, it is a creature of contract, i.e. Centre, 12 Bloomsbury Square Bloomsbury Square is a garden square in Bloomsbury, Camden, London. The square was developed by 4th Earl of Southampton, in the late 17th century, and was initially known as Southampton Square. It was one of the earliest London squares. , London WC1A 2LP Tel: 020 7421 7444 www.arbitrators.org The Academy of Experts 3 Gray's Inn Gray's Inn: see Inns of Court. Square, London WC1R 5AH Tel: 020 7430 0333, www.academy-experts.org Thought starters * Do you have all the facts and information, and have you taken the best available advice? * Are you clear about the outcome that you want? * Have you considered your options before deciding which route to take (litigation, arbitration or ADR)? * What are the financial implications of this dispute--the costs and the benefits? |
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