Conflict and disagreement can be resolved through a process known as “dispute resolution”. It often involves methods to solve a disagreement without going to court.
In the event of a contractual disagreement, it is essential to first examine the original document. It can tell you how severe the disagreement is and how to proceed in the event of a breach of contract.
If you want to know which laws apply to your contract and whether or not there is an option for alternative dispute resolution (ADR), you should read the governing law and jurisdiction terms. In this article, Contract Dispute Resolution Methods, we take a look at how to resolve commercial disputes and the options open to you.
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For a free initial discussion on how we can help you if you are involved in a contract dispute, get in touch with us today. We are experienced in dealing with all forms of commercial litigation and the various dispute resolution methods. We will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
The first thing to do is review the contract
The first thing to do is read the contract thoroughly. You can use the details provided in the contract to figure out the elements discussed below.
How serious is the disagreement?
In the event of a breach of contract, it is necessary to examine the terms of the agreement and establish which clause was broken. The contract can be cancelled and the innocent party can sue for damages if there is a substantial violation.
If the violation is minimal, the innocent party can just sue for monetary damages, and the contract itself will still be in existence.
Understanding the gravity of the disagreement is essential in grasping its implications, the parties’ entitlements, and the possible avenues for finding an alternative resolution.
Is there a non-binding alternative dispute resolution (ADR) provision in the contract?
One method to help the parties achieve a mutually agreeable resolution of the conflict is through a provision such as this, which lays out the procedures you and the other party must follow before engaging into a legally binding decision. Negotiation, mediation, and early natural evaluation are the most common types of non-binding ADR.
Is there a binding decision in the contract?
The parties agree to submit their dispute to an independent third party for settlement under the terms of this enforceable dispute resolution provision. Arbitration agreements and expert determination or adjudication are the most prevalent methods used to get a final and binding ruling instead of going to court.
Is there an escalation clause?
It is common for contracts to include an “escalation clause”, also known as a “tiered dispute resolution clause”, if the parties initially agreed to have their respective representatives engage in good faith negotiations to settle any disagreements that could arise. The parties’ obligations to take certain actions before reaching a final, legally binding judgement are also spelled out in the escalation clause.
What are the non-binding dispute resolution methods?
One of the main goals of alternative dispute resolution is for the parties to establish a mutually agreeable “without prejudice” settlement. The ADR procedure’s most notable qualities are its adaptability, low cost, and speed. The fact that it is “without prejudice” means that if a settlement is not reached, the parties’ positions will not be weakened if they want to pursue other resolution procedures. Regarding alternative dispute resolution, it’s important to note that you and the other party are legally prohibited from using or referring to any information discussed there.
Negotiation: an attempt by the parties’ representatives to settle the disagreement in a neutral setting, with the goals of maintaining the parties’ business relationship and finding a way forward that will be both expedient and inexpensive.
Mediation: To put it simply, mediation is when a third party acts as an impartial arbiter to help parties reach an agreement. In summary, this puts the burden of settling the dispute on you and the other party.
Early neutral evaluation (ENE): Before going to trial, the parties to a disagreement can get an impartial assessment of how things will turn out if they engage in early neutral evaluation. There are two courts that help make ENE possible: the Commercial Court and the Technology and Construction Court.
What are the binding dispute resolution methods?
If the contractual disagreement cannot be resolved through the non-binding option, the parties should move on to the binding option. A binding agreement provides greater order, costs less, and is more official than litigation.
Examples of legally binding alternatives to litigation include:
Arbitration: In arbitration, a neutral third party, rather than a judge, decides the outcome of the dispute. The existence of an arbitration agreement between the parties determines whether or not a party has the right to refer a dispute to arbitration.
Expert determination (ED) is an alternative dispute resolution method in which the parties jointly select a qualified neutral expert to make a binding decision about the issue. Privately conducted ED is geared on providing quicker and more cost-effective resolutions to commercial disputes for firms.
Adjudication is a binding method of dispute resolution used only in the construction industry.
What are pre-action protocols?
Before a commercial dispute can be formalised, there must first be an established basis for a claim. A significant aspect of the commercial dispute process is providing evidence that you tried to take every possible action to avoid going to court. In many English courts a “pre-action protocol” may be required, which you need to meet in full. However, if this does not apply to your case, it does not need to be enacted.
If a case has good standing and the client has contacted the relevant professionals, they can complete a claim form and send it to a relevant court.
If the claim is more significant, the UK legal system uses a three-track system to resolve the issue:
Small claims – any claims that have a value below £10K and will last for less than a day.
Fast track – any claims with a value between £10K-£25K and will last for a day or less.
Multi track – any complex claims with a value of £25K or more and will last for more than a day.
Once tendered, the chosen court will deliver what is known as an “order for directions” that will stipulate the process for carrying out how the case will be conducted. This gives guidance on what documents need to be disclosed, due process, timetable for the trial, and other variables that are specific to your case. Once complete, the case is formally listed for a judge to reach a decision over.
How we can help
We have a proven track record of helping clients involved in contract disputes. There can be an array of issues to take into consideration and we will guide you through all the necessary legal due diligence in a comprehensive and timely manner and support and advise you with all the negotiations. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
Please click here to find out more about our Commercial Litigation services.
How to contact our Commercial Litigation solicitors
It is important for you to be well informed about the issues and possible implications of a contract dispute. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Commercial Litigation solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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