Avoiding Disputes - Clarity Pays Dividends

Posted: Wednesday, 17 March 2010 @ 10:57
Avoiding Disputes - Clarity Pays Dividends

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Starting a business is not easy and running it on a day-to-day basis is equally trying in today’s ultra competitive climate. It is to be expected in such a scenario for the everyday gripes and grudges of staff, customers, and management to boil over and for such issues to escalate rapidly into a fully blown commercial dispute. What therefore can be done to avoid and manage such a risk and eventuality?

Mantra 1: Live and Let Live



Manage your emotions to manage your clients.

Yes I know we all have them: “The clients from hell” – those demanding individuals who never stop asking for more or who are serial complainants about the most trifling matter.

Regardless of your own personal preferences my advice would be to deal with the issues not the personalities no matter how irritating the characters may be. Allowing personality and “grudges” to cloud your financial and legal judgement is a recipe for disaster. Quite often you can turn the complainant to your advantage by using the individual to provide you with a customer focus group on how the service/product might best be improved. “Grasping the nettle” here is preferable to fobbing off the complainant with weak excuses and with customer help lines that provide no respite.

Be brave - face up to the storm and seek to turn it around to your advantage. Remember: the best PR and cheapest advertisement is word of mouth.


Mantra 2: Be Flexible - Lose the Battle to Win the War


Be prepared to admit your mistakes wherever possible and to provide rebates if service or goods is not up to scratch.

The service level agreements and key performance indicators agreed upon should hence be manageable and should be clearly expressed so as to leave nothing to doubt. Ask a friend, work colleague, or solicitor to look through these with the aim of trying to find ambiguity and “holes” which could either be exploited in the future or which could lead to ambiguity and dispute.

Clients will know instinctively when there is sincerity of response and when there is not so be prepared to compromise in order to keep the customer content even where strictly there is no legal requirement for you to do so. Winning on a legal technicality may make you feel better but the effect may only be temporary, as the client undoubtedly will take his /her business elsewhere.

A client will appreciate honesty and straight talking and will inform his work colleagues, family and friends of a situation redeemed (even if the job done was perhaps not A* class) so long as a fair and reasonable response subsequently was achieved.


Mantra 3: Clarity Counts with Customer Complaints


Clarify your customer service objectives generally and your complaints procedure specifically. Ideally you should have a code of conduct on dealing with complaints that would form part of your contractual relationship with your client. This might cover:
  1. Response times to acknowledge and respond to any complaint.
  2. Investigation procedure and timing.
  3. Escalation procedure (from manager to director level if then unresolved).
  4. If unresolved at this stage then perhaps to mediation with an agreed procedure/body/timescale.
In drafting these objectives, input from potential or actual clients at the outset would be critical in order to get feedback as to the approach.

Good complaints handling will provide you with an opportunity to make amends and to show that good service can be provided. It might in the end win over an irate customer who otherwise might take their business elsewhere. Waiting endlessly listening to some tortuous repetitive music on an interminable customer complaints answer phone to a call centre in the other end of the country (or increasingly the other side of the world) is highly unlikely to win many friends. So investing adequate management time and effort here is essential in order to provide a non-technical and practical solution to the problem.

Seeking to impose unfavourable or draconian complaint terms without customer involvement is inadvisable however. Not only would it be imprudent in terms of general business sense but also it could fall foul to DTI guidelines on fair-trading and the general law as to applicability of exclusion and liability clauses. Hence it pays to take legal advice here which should pay dividends in the long run.

Contact Cousins Business Law for advice on this topic.
Blog by Gary Cousins
Gary has been providing legal advice to shareholders, directors and business owners for over 25 years. Specialising in dispute resolution Gary is based in Birmingham with clients throughout the UK and overseas. View profile
Call Gary on +44 (0)121 778 3212 or by email
This blog 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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