Disputes are a part of a business adventure. It is time consuming, irritating and it costs money. But, this conflict can be handled smoothly if you know the steps to follow. According the CEDR Mediation audit – 10,000 commercial mediations were performed in 2016, an increase of 5%. Here is a step by step guide for a peaceful resolution of business issues:
Know Potential Disputes
Anticipating issues that may come up down the line enables you to prevent them.
The most likely disputes will be with:
- your contractors – the product is not delivered or one party does not pay,
- your customers – customers who don’t respect product warranties,
- your employees – termination, discrimination, harassment.
Most disputes might be settled by using a common sense approach:
- Listening: to avoid disputes you need to listen to your customers, suppliers or employees.
- Review Procedure: carefully draft your internal procedure and your agreement to ensure they fulfill all legal requirements. For example, clear hiring policies might avoid discrimination issues.
- Written agreement: to prevent future misunderstanding your contract should be in a written form.
- Legal obligations: to you should fully understand your legal obligation. In that way, it is risky to use only templates for drafting your contract.
- Dispute resolution clause: carefully read your contract dispute resolution clause. Usually this clause requires resolving conflict by mediation or binding arbitration.
Alternative dispute resolution (ADR) refers to different ways of resolving disputes that don’t involve going to court. These ways have been endorsed by the government in the Alternative Dispute Regulations 2015.
Why? Going down the ADR route can help avoid the expense of a courtroom and resolve issues more smoothly and much more quickly than litigation.
How? There are two different collaborative practices; mediation and arbitration.
- An independent third party helps parties to come to a mutually acceptable settlement.
- This is confidential. The mediator is objective and does not the have authority to make a binding decision. Thus, their only responsibility is to try to help the parties to come to a decision by themselves.
- An independent third party considers the facts and makes a binding decision.
- Here the arbitrator has the authority to make a binding decision.
If none of this enables you to avoid conflict, or if you do not wish to choose arbitration, your last option is going to court.
To prevent yourself from having further disputes, you should be aware of your rights and duties. If disputes arise anyway, you should try to resolve them using alternative dispute resolution methods.
If you’re unsure about the legal advice that you or your startup require, we offer a Free Legal Session We’ll talk you through your needs and answer the questions you may have on Seed Funding. Book a session here.