Spotting a Business Dispute on the Horizon
It is not uncommon for business people to come to us for advice on a dispute once it has reached an advanced stage – usually once they receive a solicitor’s letter or court proceedings have already started. If you can nip a dispute in the bud, so to speak, it can often be resolved much more quickly and with far less cost.
Dispute management solicitor, Gary Cousins looks at how to spot a business dispute.
So how can you tell there might be a dispute looming?
Payment delays
It is not unusual in the present economic climate for SMEs to experience delays with payment – usually this is a sign of your customers trying to manage their cashflow. However, it can often be a sign that someone is not happy with your goods or services. It is definitely true that we British do not like to complain and so, frequently, the first sign of a dispute brewing will be a lack of payment.
If you are experiencing payment delays, ask why. If your customer has a complaint, it is better to know sooner rather than later, as problems can often be sorted out before firm positions are taken and lots of money spent on legal fees. If they don’t complain and just say it is down to cashflow problems, confirm this in writing – then you’ll have some evidence that they were happy with your goods or services should they later make a claim. If they still fail to pay up, take action to recover the debt, taking the Cousins Business Law zero tolerance approach to bad debt, and reduce the likelihood of this happening in the future.
Communication dries up
Another sign of a dispute brewing is when someone stops communicating with you. We live in an age of instant communication so, if someone has stopped returning your calls or emails, especially when they used to respond quickly, there is generally something wrong.
If this does happen, take it as a signal to get your paperwork in order and seek advice. We recommend 5 steps to effective handling of business disputes. Often, a solicitor’s letter will restart communications. Even if their response is not what you would want to hear, it does open the way to resolving any dispute.
Guilt
Do you feel that something went wrong with a particular client or contract? It is natural not to want to admit fault but, if you do feel that you should have done better, then this again is a sign to get your paperwork in order and seek advice. That advice might well be that you are in a much stronger position than you thought but, if not, at least you can start marshalling your strengths and weaknesses in preparation in case a claim is eventually made.
Our prediction is, that as the economy continues to falter and businesses across the world start to suffer, there will be a continued increase in the number of business disputes which, if not carefully managed, could see small and medium sized businesses facing punitive legal bills or, worse, being driven to the brink of existence.
Take advice, take it as soon as you spot a dispute on the horizon, and you will have a much better chance of preventing a full blown dispute occurring, or at least minimise the time and cost involved in a case that’s unavoidable and maximise your chances of success.
Cousins Business Law offers a free half-hour telephone consultation for anyone with a business dispute. Call us on 0845 003 5639 or book online here.
Article added: 9 February 2009 © Cousins Business Law
This article is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.
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