Small business disputes are normal, but how you manage them can make or break your business and reputation. Whether it’s a contract, employee complaint or cheque or bank transfer payment dispute, resolving disputes quickly is key.
The process of dispute resolution can involve mediation, arbitration or even court litigation under the Arbitration Act. Knowing your rights, legal costs and options – such as the Chartered Institute of Arbitrators (CIArb)’s Business Arbitration Scheme – will help you manage business disputes and keep legal fees in check.
1. What’s the Core Problem
To resolve disputes effectively you need to identify the exact issue. This means reviewing relevant contracts, the claims of the other party and ensuring all sides are heard. A brief summary of the dispute will help focus the discussion and see if a cost effective resolution is possible.
2. Keep Communication Open
Open and professional communication can prevent the dispute from getting out of hand. Whether it’s a supplier, customer or employee, direct talk can clear up misunderstandings and set the next stage for resolution. Make sure a properly authorised person from the business handles the discussion.
3. Review Contracts and Agreements
Contracts and agreements are the foundation of most business transactions. Reviewing these documents is key when a dispute arises. The applicant’s statement should highlight any breach or misunderstanding of the contractual terms. If there’s ambiguity, professional advice from a solicitor will help you decide if a unilateral application for arbitration or legal action is needed.
4. Alternative Dispute Resolution (ADR)
The Small Business Commissioner recommends using alternative dispute resolution (ADR) methods such as mediation and arbitration for lower value disputes. The CIArb’s Business Arbitration Scheme is one option where small businesses can resolve disputes with a sole arbitrator, get a binding decision without the time and cost of full litigation.
- Mediation: A neutral third party helps the parties agree on a solution.
- Arbitration: The dispute is heard by an arbitrator who makes a binding decision, reducing the need for court intervention.
- Business Arbitration Scheme: This quick process allows businesses to resolve disputes cheaply.
5. Legal Action as a Last Resort
If all else fails, legal action may be needed. Business disputes that can’t be settled through mediation or arbitration will need to be litigated under the Arbitration Act. In this case, witness statements, supporting documents and a detailed knowledge of the relevant contracts will be required.
Legal advice from experienced professionals like Martyn Prowel Gartsides Solicitors can help with claims, arbitration and court litigation. They can explain the process, prepare the side’s statements and help businesses navigate disputes with a solid legal strategy.
6. Prevent Future Disputes
To avoid future disputes small businesses should:
- Draft clear and enforceable contracts.
- Document all transactions, including cheques and bank transfers.
- Get professional advice when entering into contracts.
- Use a business arbitration scheme when cost effective dispute resolution is needed.
- Train staff to deal with complaints to prevent conflicts escalating.
Conclusion
Small business disputes are stressful but resolving them through mediation, arbitration or legal action is vital to stability. Whether you need a binding decision through the CIArb’s Business Arbitration Scheme or preparing for court litigation small businesses need to take a strategic approach to dispute resolution.
For bespoke support contact Martyn Prowel Gartsides Solicitors who specialise in small business disputes, arbitration and legal representation. They will help you resolve disputes quickly and cheaply.
If you’re currently facing a dispute, act quickly—review your contracts, seek legal advice, and decide on the most cost-effective way forward.