Q4 2019

14 | Q4 2019 Disputes can happen to any business and be costly, disruptive and damaging to its reputation. Alison Brinkworth discusses with a litigation expert what companies can do to nip these issues in the bud. Whether it’s a product complaint or a disagreement about a contract, there’s no denying that disputes can quickly get out of hand and be costly, particularly to SMEs that often rely on their reputation. British business lobby group, the Confederation of British Industry (CBI), has put the cost of conflict to UK businesses at a staggering £33 billion every year. Interestingly, within that figure, the cost of damage to businesses stood at £27 billion and far outweighed the cost of legal fees, at £6 billion in comparison. It was based on research by the Centre for Effective Dispute Resolution (CEDR), which also found that 80 per cent of cases had a significant impact on the smooth running of the business; highlighting that there are also serious knock-on effects of disputes to consider too. The Legal Ombudsman is another organisation that has examined the issue of complaints in some detail with results that are relevant to SMEs trying to get ahead of the game on this issue. What the Legal Ombudsman’s extensive research shows is that a good complaints- handling process can be a positive for firms because it gives consumers confidence that a company is customer focused along with helping a business learn from its mistakes and identify ways it can improve. Bryony Cook, a Dispute Resolutions and Insolvency Solicitor at leading law firm Aaron & Partners has worked on specialised advice for business owners and managers, to help them reduce the risks associated with disputes. As part of the firm’s dedicated Dispute Resolution & Insolvency team, she knows only too well the pitfalls and scenarios that come with complaints as she gives practical advice to clients across the UK at all stages of the litigation process. Bryony said: “Disputes can happen in any business and can be costly, disruptive and damaging to a company’s reputation but there are various steps that business owners can take in order to minimise the risk of litigation happening - or at the very least to make sure they’re well prepared in the event that it does happen.” The dispute resolution expert has these five top tips to help businesses reduce the risk of litigation in their organisation. Put it in writing “In the interests of achieving clarity and avoiding confusion should a dispute arise, your business needs written documents which it can rely upon; such as contracts, terms and conditions, invoices, employment contracts and shareholder agreements,” explained Bryony. She added that should there be a disagreement, it is far easier to resolve it if the terms are in writing and the parties have been made aware of the terms. Businesses are advised to regularly review and update these documents to make sure the company is being protected. Know your documents “Both you and your employees should know your business’ documents and the relevant contractual terms,” added Bryony. “For example, your terms and conditions should clearly state the applicable payment terms, interest provisions and what happens in the event of a default. “It is particularly important for you to know what your contractual documents say about matters such as termination and breach of contract so that you can follow any procedures which are required under the contract.” Keep up communication Facilitating early communication is the key to attempting to overcome any dispute. “Parties are now expected to communicate long before proceedings are issued, otherwise you risk being criticised by the court and penalised or sanctioned in respect of costs,” said the solicitor. “This is just as relevant for external issues with your customers and suppliers as it is for internal ones; such as with employees or shareholders.” Consider alternative dispute resolution Before litigation is commenced Bryony advises businesses to consider whether there is an alternative step that can be taken, which would avoid the need for court proceedings. Some examples to consider are mediation, without prejudice settlement meetings or correspondence and in certain cases; arbitration may be the most appropriate. This can be dealt with in a dispute resolution clause in your contracts. “If you are able to reach a resolution before proceedings are brought you will inevitably save significant time and costs in dealing with the claim,” explained Bryony. “This also helps you to attain certainty for your business.” Get legal support and advice If you wish to continue minimising your litigation risk, Bryony’s recommendation is to seek ongoing advice from legal professionals and particularly upon being made aware of a potential claim. Simple ways that every SME can reduce the risk of litigation from disputes

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https://www.athenatherapies.co.uk/ https://pressreleases.responsesource.com/news/25571/conflict-costs-business-33-billion-every-year/ https://pressreleases.responsesource.com/news/25571/conflict-costs-business-33-billion-every-year/ https://www.legalombudsman.org.uk/ https://www.legalombudsman.org.uk/ https://www.legalombudsman.org.uk/ https://www.aaronandpartners.com/ https://www.facebook.com/plumcarebromley/ http://6figurepractitioner.com/networking/