If you’ve run a business for any length of time you are bound to have had problems or disputes with customers, suppliers or members of staff. The secret to survival is to keep the number of disputes to a minimum and avoid expensive litigation. Litigation, the process of resolving a dispute by using the court system, is a meticulous “belt and braces” approach, where the court looks at all the documents, hears what everyone has to say and then decides on what happened and what should be done to resolve the dispute. Such an approach means that costs are often high, both in legal fees and time.

So how can you avoid litigation or, if you can’t, how can you keep costs to a minimum and increase your chances of success?

Think of the worst case scenario
The first, and perhaps the most important way, is to get the contract right. This should start when you are negotiating an agreement or deal. Remember sod’s law and think about what could go wrong and what would happen if it did. Most problems are caused by being let down unexpectedly by your suppliers (often you will be held responsible) or there being a difference in expectations between you and your customers.

Get the agreement in writing
Once you’ve negotiated the contract and have agreed the best terms you can, put them in writing and get them signed. If you’re doing similar, repetitive work, get your terms and conditions drafted and make sure you’ve agreed to work under them. If you’re doing one-off work, get a proper contract drafted. It’s worrying how many people don’t do this and, when things go wrong, everyone has different versions of what was agreed – which of course makes it so much more difficult to resolve problems amicably.

Take early advice
When things start to go wrong, get legal advice as soon as possible. You will need to know the strengths and weaknesses of your case at the outset and the likely costs and benefits of fighting your corner.

You will also need advice on the best method to resolve the dispute. Would mediation, getting a neutral third party involved to ease negotiations, be helpful? If it’s a technical dispute, what about going to an independent expert in your field to make a decision? Could you simply marshal all your arguments and have a direct meeting? This will mean deciding in advance how best to push home your strong points and deal with your weak points.

Sometimes you can’t avoid litigation but, if you follow these tips, you’ll be best placed to sort things out with the least pain possible.

For more information on business contracts and handling disputes visit www.business-lawfirm.co.uk or call Gary Cousins on 0121 778 3212.

Small businesses could be leaving themselves open to legal action, after a recent survey revealed 40 per cent of them are unaware of the forthcoming changes to age discrimination legislation.

Firms should be auditing their employment policies and reviewing pension schemes, retirement policies and healthcare arrangements as part of their overall planning and strategy, so they are prepared well ahead of October 2006.

The changes in the law mean that a person over the age of 65 will be permitted to take a case of unfair dismissal to an employment tribunal. Under current legislation employees over the age of 65 can’t claim unfair dismissal. Our motto – be prepared.

Q: We offer a payroll bureau service to our clients. We are registered as data controllers under the Data Protection Act and follow all the rules about how we store and handle data but someone suggested to me the other day that our clients may not have the permission of their employees to pass their data to us. Is this true and if so how do we stand legally and how can we continue to deliver payroll services?

A: It’s great that you are following the rules about data protection and are registered as many do not and are not! So you are already in a better position than many. But I do see your problem.

A complex answer is to examine all the paperwork and contracts between the employers and employees including any Office Handbooks and so on. But that is not a serious commercial answer and not the Woolley & Co approach, so let’s leave it.

I think the best approach is for you to ensure that your contract with every client who passes you data ensures that you are given absolute guarantees that they have the right to pass data to you and that they indemnify you against any breach of that. You might find our Growing Business: Legal audit fixed fee offer useful to you.