Crash Course in ... Settling commercial disputes

Your contract with a leading supplier has gone wrong and could cause you big losses. It's not just about money - there are serious principles at stake. The other side is not backing down and you've already threatened to see them in court. So what next?

by Alexander Garrett

Time for a quiet word? Disputes can sometimes be sorted out by face-to-face negotiation without getting anyone else involved, says Alex Bishop, head of disputes resolution at solicitors Shoosmiths. But beware taking the softly-softly approach. 'You risk that disputed assets may be dissipated, evidence may be destroyed or you could prejudice proceedings,' she says. 'It's often better to take legal advice straight away.'

How much do you stand to lose? You need the 'quantum' to decide your strategy, says Bishop. 'If it's only tens of thousands of pounds, litigation may cost much more than that. And if there have been breaches of contract but no actual loss involved, there's no case - you can't claim for damages.'

Consult internally. 'Look at the dispute in the wider context for your business,' says Rhys Clift, a qualified mediator and partner at lawyers Hill Dickinson. 'It's no use your legal department mounting a ferocious action over one product if the other party is a key supplier across all your product lines.'

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