Businesses increasingly run litigation risks. Whilst it is not usually possible to completely rule them out, it is important to have processes in place to manage the risks effectively.

Lawyers regularly see litigation arising out of poorly documented business transactions. You need to ensure that all your business arrangements are in writing and in clear terms. It is also important to ensure that variations are agreed and formalised in writing before work commences. If you consistently trade with another party over a period of time on the same terms, it may lead to those terms being incorporated into your agreements, even when they have not been formally agreed between you and the other party.  It is therefore important to remember that if you deal informally with a long-standing client, you may be subject to some burdensome terms incorporated by course of dealings.

It is beneficial to have a document management system in place which allows you to manage contracts and preserve documents. The Court rules specify that where a dispute is contemplated, there is a duty on parties to preserve documents from being destroyed or deleted. The meaning of ‘document’ includes all paper and electronic documents and communications, databases, text messages, social media communications and metadata.

Whatever the situation is, early planning is crucial. Planning a dispute resolution strategy from the beginning dramatically increases your chances of a quick and successful resolution.

If you think a dispute may arise, speak to a lawyer at the earliest stage to ensure that discussions are handled effectively and that the position is not prejudiced by actions or omissions of your staff. Remember that internal correspondence is disclosable in Court proceedings, but if a dispute is on the horizon, steps can be taken to ensure that internal communications about it are protected and not disclosable. Regardless of your position on the situation, avoid making admissions about the disputed matters.

Parties should attempt to resolve disputes by engaging in a dialogue. Ensure that the dialogue is held on a ‘without prejudice’ basis, and correspondence is marked without prejudice, so that your own case is not prejudiced if it ends up in Court. If you are considering making an offer to end the dispute, ensure you work closely with your lawyer to ensure the process is handled correctly.

Awareness within the business of the value of proactive litigation risk is paramount. The steps described above will help you to plan ahead and successfully manage potential disputes.

If you have any questions about how you can better protect your business, please contact Yulia Barnes in the commercial / litigation team at Artington Legal on +44 (0) 203 740 2360 or email her directly at [email protected]  Click here to read Yulia’s profile.