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5 Top Tips to Minimise the Risk of Litigation for your Business

28th June, 2019

Although litigation is sometimes inevitable and necessary in the business, there are various steps that you can be taking now in order to minimise the risk of litigation happening and may also help your case should you be faced with litigation in the future.

Here are our 5 top tips for your business:

          1. Put it in Writing
In the interests of achieving clarity and avoiding confusion should a dispute arise, your business needs written documents which it can rely upon; such as contracts, terms and conditions, invoices, employment contracts and shareholder agreements. Should there be a disagreement it is far easier to resolve this if the terms are in writing and the parties have been made aware of the terms. These documents should regularly be reviewed and updated to make sure that they are protecting your business in the way that you want them to.

          2. Know Your Documents
Both you and your employees should know your business’s documents and the relevant contractual terms. For example, your terms and conditions should clearly state the applicable payment terms, interest provisions and what happens in the event of a default. It is particularly important for you to know what your contractual documents say about matters such as termination and breach of contract so that you can follow any procedures which are required under the contract.

        3. Keep Up Communication
Facilitating early communication is the key to attempting to overcome any dispute. Parties are now expected to communicate long before proceedings are issued, otherwise, you risk being criticised by the court and penalised or sanctioned in respect of costs. This is just as relevant for external issues with your customers and suppliers as it is for internal ones; such as with employees or shareholders.

        4. Consider Alternative Dispute Resolution
Before litigation is commenced you should consider whether there is an alternative step that can be taken which would avoid the need for court proceedings. Some examples to consider are mediation, without prejudice settlement meetings or correspondence and in certain cases; arbitration may be the most appropriate. This can be dealt with in a dispute resolution clause in your contracts. If you are able to reach a resolution before proceedings are brought you will inevitably save significant time and costs in dealing with the claim. This also helps you to attain certainty for your business.

         5. Get Legal Support and Advice
If you wish to continue minimising your litigation risk, you should seek ongoing advice from legal professionals and particularly upon being made aware of a potential claim. It is imperative that you do this at the earliest opportunity given the obligations which are now placed on parties by the court once a claim is contemplated; in terms of pre-action correspondence and disclosure of documents.

If we can be of assistance or if you require advice in relation to any disputes or claims that your business may be facing, please contact Bryony Cook.

Bryony Cook

Dispute Resolution & Insolvency

Associate
Email: [email protected]
Tel: 01244 405 412

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