Resolving a business dispute – what are my options?

Alistair Gregory

Alistair Gregory

A commercial dispute can arise for a range of reasons and lead to a host of complications. Alistair Gregory, Partner in the Commercial Law Team at Stephensons Solicitors LLP, discusses a business’ options, how the pandemic has affected how businesses approach disputes and what needs to be considered if pursuing litigation

For the best part of 18 months, businesses of all sizes have faced an unprecedented challenge. Covid-19 has placed a huge burden on the shoulders of many business owners, pushing some firms to the very brink of survival and sadly forcing others to fold altogether.

Juggling the demands of running a business is difficult at the best of times, let alone during a global pandemic. When a commercial dispute arises, it can lead to a whole host of complications for business owners as well as a significant amount of additional stress.

It’s little wonder then that many businesses will look to resolve these disputes as quickly and efficiently as possible, trying to avoid the often-costly court fees that can quickly mount when a dispute rumbles on.

COVID-19 – A cause for conciliation? 

Earlier this year, research conducted by the accountancy firm, EY, found that 63% of businesses had adopted a more conciliatory approach to business disputes since the start of the pandemic.

It found that 81% of companies had applied reliefs to contract terms since the pandemic began, with 69% granting or receiving time extensions. Some 77% of companies surveyed by the firm had also used Alternative Dispute Resolution (ADR) to resolve an issue during the pandemic rather than enter court proceedings.

The research from EY mirrors our own experiences throughout the past 12-18 months. We certainly saw a decline in the number of companies pursuing legal action, particularly at the outset of the pandemic and during the later peaks. This was largely because businesses were scrambling to adapt to the changing business landscape and new ways of working.

In March and April 2020, many companies had to undertake an unforeseen restructure and overhaul the day-to-day running of their business. This brought about a host of financial pressures and prevented many from pursuing litigation, particularly given how costly this experience can be.

As a work-around, some companies with claims already underway turned to alternatives to litigation such as engaging in mediation or engaged in early settlement in order to avoid incurring the costs of litigation. For those companies who had not yet pursued litigation when the pandemic commenced, some opted to hold off altogether until the effects of the pandemic started to ease.  As we progress further in 2021, it is likely that more companies will revisit litigation as a means of resolving their disputes.

What does the picture look like now?

The Courts have faced a huge amount of upheaval and change, ultimately resulting in a backlog of cases still working their way through the system. Businesses looking to pursue legal action at this time should be prepared to face delays when dealing with Court matters.

Companies wishing to pursue litigation may also face the challenge of budgeting for the costs of litigation in what has been a turbulent year financially for most businesses.

If you’re considering pursuing litigation, it’s worth keeping the following in mind:

  • Expect delays: Due to the courts dealing with a backlog of cases, delays are to be expected. Factor in additional time to account for these delays to avoid missing any deadlines or limitation date.
  • Be reasonable: It’s important to be cooperative when faced by challenges and delays caused by the pandemic so as to act in accordance with the overriding objective
  • Consider the alternatives: If suitable, you might want to consider alternative dispute resolution, which can keep costs down and result in a much quicker resolution
  • Budget: Keep a close eye on your costs and ensure an appropriate litigation budget has been considered
  • Be flexible: Remote hearings and different ways of working are likely to continue – ensure as a business that you are equipped to accommodate attendance at remote hearings