Commercial disputes can prove costly for all types of businesses. Whether you operate as a sole trader, an SME or as a multinational corporation, resolving disputes quickly is key to maintaining good cashflow and the ongoing success of the business. Whilst disputes can arise over any type of business transaction, issues relating to goods or services supplied commonly arise when you start chasing your client or customer for outstanding payments.
In such cases, it’s essential that the dispute is resolved quickly. If payment remains outstanding over a significant period of time or the dispute escalates and creates bad blood between you and your customer, your business could suffer catastrophic harm. SMEs, in particular, can struggle to operate if regular late payments occur or if incoming funds aren’t received on time.
Going to court may seem like an ideal solution if a client has failed to pay a bill or broken the terms of the contract. However, taking a case to court can be costly and time-consuming. In addition to paying court fees, it’s likely that you’ll need to pay expensive bills for legal representation. In some cases, the cost of going to court may be higher than the money you’re hoping to recover and it could take up to 2 years to get to trial in some cases.
Fortunately, going to court isn’t the only way to resolve a commercial disagreement. Alternative dispute resolution (ADR) provides a range of methods when it comes to commercial litigation and debt recovery.
Negotiation, mediation and conciliation allow the parties to come together and find a solution to the issue, often with the use of an impartial person to manage the meetings. Mediation has a high success rate. A skilled mediator can often help the parties find a solution even when the parties themselves initially felt there was no chance. However, if this doesn’t seem like a viable way to resolve potentially acrimonious disputes, the options of arbitration or adjudication could provide an ideal way for the issue to be dealt with swiftly if the terms of your contract allow such options.
With court being seen as a last resort, ADR provides a cost-effective way for businesses to resolve disputes. As less contentious forms of dispute resolution, negotiation, mediation or conciliation may even enable you to foster an on-going business relationship with the client.
If you need help enforcing late payment law or you require help with UK and international debt recovery, don’t head straight for the court system. Using ADR could help you to resolve your disputes efficiently and effectively, whilst reducing your business costs.