Handling a Dispute
This checklist sets out the actions your business should take when a dispute or potential dispute arises.
Does your business really want to be involved in legal proceedings?
It is very important to understand what your business is getting involved in. It is almost always better to find a commercial solution to a dispute. Your business should consider:
- The value of the claim, the costs involved and the commercial implications of success or failure. Even if your business wins, you will not recover all of the legal costs you have incurred.
- What your business is trying to achieve from the court process.
- The time, cost and management commitment involved.
- How it will affect your ongoing commercial relationship.
- Whether the mere existence of a dispute will create difficulties in bidding for new business or otherwise adversely affect your business’ reputation.
- Whether there is a commercial advantage to the dispute (for example, by showing that your business is serious about trademark infringement).
- What the effect will be for both parties if the dispute is made public.
- Whether the other party will be able to pay if you win.
- All litigation is to some extent speculative (for example, how will the witnesses perform in the witness box?).
Is it possible to negotiate a settlement?
- Always take legal advice first to ensure the settlement discussions are conducted on a “without prejudice basis”. This means that anything said about the dispute during the settlement negotiations or in any written settlement offer cannot be used later at the trial. This protection only applies to statements made purely in an attempt to settle the case.
- Consider who should handle any negotiations. It is generally advisable to appoint one person with overall responsibility.
Practical steps to take when a dispute or potential claim arises
- Your business should take legal advice as soon as possible after an incident occurs.
Do not destroy, delete or amend any relevant documentation
Be careful when discussing a potential dispute or preparing a report on an incident
Are you insured?
Check your business’ insurance policy to see if it is an insured claim. If it may be, notify your insurers immediately and follow their claims procedure, otherwise you could invalidate the insurance claim. Your business may need to seek the insurance company’s consent before you take any action.