A Guide to Resolving Business Disputes Out of Court

How to resolve your disputes - without the cost of litigation

A Guide to Resolving Business Disputes Out of Court

Whatever the business you run, it is sometimes unavoidable to become embroiled in disputes with clients, suppliers or even employees and co-owners. It may be a late payment dispute or a supplier who has delivered defective goods or has not delivered on time. You may nonetheless want to maintain a good working relationship in the future with the party with whom the dispute has arisen. In such cases, it is worthwhile considering the alternatives to the cost and time of taking the case to court.
Some may think going to court is the only option to resolve a business dispute. Alternative Dispute Resolution (or ADR for short) is the term that describes a range of procedures and techniques to resolve disputes usually with the help of a neutral third party and without going to court. In recent years the courts have also been encouraging parties to use ADR. In appropriate cases, ADR can offer a quicker, cheaper and more effective means of achieving a resolution for business owners.
If you are dealing with a business dispute, whether internal (e.g. between directors, shareholders or partners) or external (e.g. involving suppliers, consultants or distributors and franchisees) you should seek professional advice without delay. We understand how stressful these situations can be and how they can divert key resources. Contact us today to find out how we can protect your business.

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What is Alternative Dispute Resolution?

The following are common types of ADR:

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This is a flexible and confidential method of achieving a settlement, entered into voluntarily by the parties. The parties attempt to reach an agreement through written correspondence or meetings. Each retains control over whether they choose to settle, and on what terms.

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Mediation is a non-binding process where a neutral person assists the parties to come to their own solution. It is ideal for preserving business relationships because it is non-confrontational, and the parties are driving the process, compromising, and coming to a mutually agreed solution. It is often said, therefore, that there is no winner or loser in mediation. The process is not legally binding unless the parties agree to formalise any agreement reached.

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Arbitration involves a sole arbitrator or a three-member tribunal weighing the evidence and reaching a legally binding decision. This is the form of ADR closest to court litigation, but there are many important distinctions.

Many businesses prefer arbitration because it allows them to have a decision maker who is an expert in the area of the dispute, it allows them to appoint the decision maker and allows them flexibility to agree how the process should run. It can be less costly and quicker than litigation, and it offers a legally binding award with the ability to enforce that award.

For businesses worried about any negative publicity the case will bring, both mediation and arbitration are confidential.

Using ADR – Factors to Consider

If you intend to use ADR to resolve a business dispute, there is a range of factors you should keep in mind when considering what method is most appropriate. These include:

    Confidentiality – do you want discussions to remain private?
    Speed – how quickly do you need a resolution? Some ADR methods typically take longer than others.
    Enforceability – do you want the outcome to be legally binding?
    Cost – certain ADR approaches are more expensive than others, so it is important to assess the financial impact when choosing the right method.
    Maintaining commercial relationships – less formal methods may allow you to preserve your relationship with the other party.

Contact our Dispute Resolution Lawyers in Glasgow, Scotland

For advice and support with a resolving a business dispute using ADR, call Morgan Legal on 0141 258 4117 or complete our online contact form.

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Regent House, 113 West Regent StreetGlasgow, G2 2RU

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