Effective dispute management is far more than instructing a specialist dispute resolution lawyer and sending them all your paperwork. Such an approach can be unnecessarily expensive as you’ll be paying for their time in wading through everything and working out what happened. There are some key things you can do to help manage your dispute efficiently and keep your legal costs to a minimum.

Appoint a Manager
Firstly, it’s a good idea to task someone in your business to manage the dispute. This might be the person with the best knowledge of what happened but also consider appointing someone for their good organisation skills.

This person should open a file and keep in it copies of the key documents in the case. They should also talk to the people directly involved and get typed statements of what happened in that person’s own words. The sooner this is done, the better, as memories do fade quickly, especially when it comes to who said what and when. It’s also a good idea to make a note on the statement of the date when it was made.

The person appointed as dispute manager should then ask the 4 questions that are key in any dispute. It might also be a good idea for them to divide their file into 4 sections to collect evidence on these 4 questions.

Question 1 – What should have happened?
Contract - Was there a written contract? There often isn’t but, if there is, have a good look at it to see whether it covers the problems that occurred. What’s written in a contract isn’t the whole story however – the law says that some clauses might be ineffective or that some clauses are deemed to be part of the contract, even if they’re not there. You may need to take legal advice on this.

Negotiations - Sometimes these are in writing (emails, faxes or letters) and sometimes these just took place orally, at meetings or on the telephone. Again, look through all of these and mark anything that covers the problems that occurred. Whether you can rely on these negotiations depends on various legal factors so, again, you might need to obtain legal advice before drawing any conclusions or taking any action.

Assumptions - All too often, we assume we know what was meant to have happened but, when we look through the documentation, we realise it wasn’t set out specifically. Consider how reasonable or necessary your assumptions were and whether they are generally accepted within your particular industry sector.

Question 2 – What did happen? What went wrong?
It’s most useful to set this out as a timeline or chronology and this can either be done on paper or on a computer. Get a sheet with 2 columns, put the date in the first column and then what happened in the second. This document can then be amended as the dispute progresses and more information comes to hand.

An example of how it could be laid out is below:

The timeline should start with the negotiations and set out when things happened, where, who was there and what was discussed. Then set out when an agreement was reached or the go-ahead given. Next set out exactly what happened, when work first started/goods arrived/machinery was installed/etc. Now go through what happened next, when you first noticed problems and how, what you or they did about it, whether it made any difference and so on. Finally, add in the key points made by any party in correspondence over what went wrong.

Question 3 – What can we do about it?
This question concerns making enquiries about what is needed to put things right (if that’s possible).

The first step is to write to the person or organisation you are in dispute with (your opponent) as soon as possible stating what has gone wrong. This is very important as, often in court cases, there are arguments over when people first found out that things had not gone right and what they did or should have done about it.

Also, if there are any meetings, where an action plan was agreed or where they admitted fault, it is best to get this recorded in writing, even if you just send a letter immediately afterwards saying what was agreed.

There are various things you can do to put things right. Often, it would be best for you to write to your opponent, setting out what has gone wrong and asking them to put things right at their expense. You might need to get someone else to look at the work previously done and quote for putting it right. It might be a good idea to get legal advice on what to do at this stage.

Question 4 – What loss or damage to our business has it caused?
It’s important to get a firm idea of this as soon as possible.

Consider what the problem is costing your business. Are you losing sales? How much is directly down to this project? What’s the impact on your profits (if you can’t sell as much, your direct expenses will also be lower)? What would it cost to put things right? Often, businesses will discover that it’s cheaper to get someone to put things right than incurring the ongoing costs of things not being as they should.

It’s also worth noting whether your opponent knew at the outset (before the agreement was finalised) the impact that this problem could have on your business. And, remember, it’s always a good idea to make it clear at the outset where a particular project fits in with your business and to make this clear in writing – if you did this, it can mean that you can claim more damages.

If you manage a dispute in the way outlined above, this will automatically lead to you having a much clearer understanding of the issues in the dispute and being able to take a proactive approach. It will usually lead to better outcomes and will certainly mean lower solicitor’s costs if your dispute has to go legal.

For advice on any of the issues in this month’s ezine call Gary Cousins on 0121 778 3212 or email Gary here.

To find out more about these and other legal issues visit the Woolley & Co website at www.business-lawfirm.co.uk.   The site also contains articles and back copies of our E-zine – which might be a useful place to start if you have a legal problem you need help with.

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