How to resolve (and hopefully avoid) commercial disputes

Settling a commercial dispute satisfactorily can save your business a lot of money, effort and anxiety. So what is the key to a favourable outcome?

Our commercial disputes specialist Tim Wolley offers his advice here:

  • Good credit management is essential – keep your company financial matters under regular review and beware of extending an account too much credit.
  • Don’t be afraid to ask – for a personal guarantee from a business owner. This is an unsecured written promise guaranteeing payment on an equipment lease or loan in the event the business does not pay. Since it is unsecured, a personal guarantee is not tied to a specific asset. However, in the event of non-payment a lender can go after the guarantor’s personal assets.
  • Have clear terms of business in place – and make sure these are incorporated into your contracts. Taking the time and making the investment to get these drafted professionally pays dividends as these are the rule book for the relationship and will probably have been long since forgotten. Lack of clarity is the key cause of disputes.
  • Do your homework – when you’re considering taking on a new business customer/supplier make sure you carry out as much due diligence as possible. A procedure should be followed which should include credit checks, checking the company file with Companies House for details about the directors/shareholders, their accounts, annual returns – any red flags here? A simple Google search can be revealing, and if you’re dealing with an individual you can check if they own a property through the Land Registry. This is a quick way to check out the solvency of a business, which is important if you’re considering partnering on a project or contracting services.

If it looks like a dispute is looming – top tips on what to do next…

  • Collate all the evidence (e.g. written contracts, correspondence and witness statements) and be careful not destroy any information which could be relevant.
  • Try to negotiate an amicable resolution as litigation can take a lot of time and money so brutally assess whether you have a strong case. It’s also essential to assess the other party’s ability to pay (which is why doing your homework outlined above – is so important).
  • Compromise – consider accepting stage payments or partial payments, or another reasonable solution, for a quick resolution.
  • Be aware that in any future litigation you will have to disclose all relevant documents to your opponent which can include internal emails, confidential documents, personal notes and commercially sensitive information which could potentially be harmful to your business. Negotiations should take place on a without prejudice basis and offers to settle a dispute should be marked “without prejudice”. Be careful as you may unwittingly make comments to colleagues in internal emails which you think are confidential but you may have to disclose in the court process.
  • Decide whether you need legal advice and talk to a dispute resolution solicitor sooner rather than later. A frank discussion exploring the likely costs, risk and potential upside of any litigation, or other dispute resolution processes such as mediation, is always advisable. A solicitor will consider the facts objectively in light of the contract terms, evaluate the risk, and help you to develop a cost-effective strategy for resolving the dispute.

Our Commercial Litigation and Dispute Resolution Solicitors act for businesses of all sizes, providing advice and representation for a range of disputes including:

  • Commercial disputes
  • Agricultural disputes and arbitrations
  • Disputes about probate and wills
  • Debt collection
  • Employment disputes
  • Insolvency
  • Intellectual property rights
  • Professional negligence
  • Property disputes, disputes between landlords and tenants, rent collection and possession proceedings
  • Regulatory disputes and prosecutions, e.g. Trading Standards
  • Shareholder and partnership disputes

If you are facing any of the issues above and you need advice and support contact our disputes specialists Tim Wolley on 01782 200007 or email or contact Sara Brumwell on 01889 598888 or email

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