In the commercial world disputes are common. They can quickly affect the profitability, operation and future of the business. As a trusted adviser to your clients you will often be approached by people who want advice in these situations.
Since there is often a great reluctance to incur costs there will be a great temptation to give some good, honest, common sense advice rather than recommending that they instruct an experienced lawyer. Here are some reasons why this may be a false economy.
Early decisions can have disastrous consequences
There are many situations in which a client can be required to make decisions, once a dispute has arisen, which can cause lasting damage to the prospects of a successful outcome. Let me give some examples
- Where the client is involved in a contract and the other party is failing to perform this properly the client may want to terminate the contract. However, the client would only be justified in doing this if there has been a serious breach. If the client terminates the contract without having sufficient grounds to do so, then it may find the tables are turned and it could face a substantial claim for damages. Take advice first.
- A landlord client may be concerned about the conduct of a tenant, and want to forfeit the lease in order to recover possession. However, if, in the meantime, it accepts any rent from the tenant, it may lose its right to forfeit. Take advice first.
- Individuals involved in small owner-managed businesses are often shareholder, director and employee. They may also be lender, guarantor or landlord. It is important to understand the differences. If you resign your directorship you may not be able to get this status back even if you remain involved as shareholder.
Get the best evidence
If it looks likely that some court action will be required, then it is important to make sure that there is good evidence to support the claim. For example
- Where an employer suspects that a former employee has taken, and is using confidential information, it may wish to apply to the court for an injunction to prevent this information being used. The client will need guidance as to how to get the best evidence e.g. where computer systems need to be examined this should be done by outside experts in order to ensure that the evidence is not accidentally corrupted during the investigation.
- With older disputes, steps should always be taken to ensure that systems which automatically delete old emails are over-ridden so as to ensure all relevant evidence is preserved;
- Evidence can exist in many formats, not just emails and letters, but a range of other electronic media;
- Appropriate expert evidence may be required.
So if you have a case you are reviewing at the moment or would like our advice on a particular problem do Get in touch with us or have a look at our website for more information. For more information on assessing prospects of success click here.