There are always going to be disputes in commerce. That is the way of the world but I think there are some cardinal rules to follow if you find yourself in a contentious situation.
- Try to negotiate an amicable solution. Review what was agreed and how clear the agreement was. Always keep evidence of negotiations including copies of letters and notes on conversations.
- Assess whether you have a strong case. Clarify how the other party has failed to live up to the agreement and consider what extent you may have contributed to the dispute. Assess the loss you have suffered and the risks of a counterclaim. Collate all evidence e.g. written contracts, correspondence and witness statements.
- Decide whether you need legal advice. Legal advice should be sought unless the argument is straightforward, represents a relatively small amount of money and runs no risk of counterclaim. Clarify the costs and timescales involved in taking the recommended legal action.
- Be prepared for a protracted and costly process if you pursue legal action. Track progress and legal costs as the case proceeds. After a successful court action, be prepared to enforce judgement to obtain payment.
- Retain any details of the other party’s bank accounts from cheques, standing order mandates etc. These can be very useful if enforcing a court judgment.
- Accept a reasonable offer rather than go to court. Consider how far you are prepared to compromise either by accepting stage payments or partial payment for a quick resolution. Continue to be prepared to compromise by accepting any reasonable offer to avoid further delays and disruption and the risk of court action.
- Waste time or money pursuing someone who cannot pay. Assess the other party’s ability to pay by, for example, running a credit check or finding out what property they own.
- Refuse to compromise.
- Ignore the risks of losing any legal action.