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Over the last decade there has been a strong shift towards finding meaningful and commercially viable solutions outside the traditional forms of litigation and arbitration. Such processes often prove to deliver efficient and effective results while saving businesses thousands of dollars in legal fees. These outcomes do not come at the expense of valuable business relationships and are less stressful; allowing you to concentrate your energy on running a successful enterprise. Next time a dispute arises, take account of these simple steps before considering legal action:

  1. Get advice first

Where a transaction hasn’t gone to plan it’s easy to get stressed and swept up in the problem. At this first stage it’s important to get advice about what to do before you act.

This advice can be from your business partners, advisers and lawyers.
By taking this initial step you should be in a less emotional state and have had time to sort out your priorities of what to do next. As a result you will avoid making a rushed decision to confront the other party or cancel a deal too quickly.

  1. Focus on the big picture goals

When deciding what action to take, it is important to keep perspective of the bigger picture and ask yourself the question:

“will my business be better off if I choose to take action or not”

By keeping one eye to the future, you can plan your actions based on the outcomes to the business as a whole instead of dealing with little issues separately. Maybe in this instance the deal didn’t go to plan, but in the future you may like to keep them as a partner or client if they compensate you for this problem. Continuing pleasant relationships is best achieved through discussion, not litigation.

  1. Pick up the phone

Communication is a very important aspect of resolving an issue. By having a chat to the other party you can come to grasps with what the real issues are so that they can be focussed on. Talking on the phone avoids the chance of a confrontational environment and allows both parties to take their time to answer the problem. You may find that they were unaware of the issue or are happy to come to a compromise to keep repeat business. Such discussion avoids the need to involve lawyers and maintains a professional partnership between the two businesses or client.

  1. Be willing to compromise

Keeping your future goals in mind, the solution you reach should be commercially viable and preserve business relationships. You may have been wronged, but try to have perspective on the other party’s positions. Was it an honest mistake, did they admit some fault, were they willing to communicate and come to a solution? A small compromise now may save you unwelcome publicity, court costs and lost business partnerships.

  1. Mediate or negotiate

If you are not confident your negotiations will create a positive outcome, mediation is the next solution. Mediation is the process whereby a neutral third party facilitates negotiations between the parties to a dispute to help them find an outcome they are both happy with. This third person doesn’t decide who is right or wrong, but rather is actively involved in suggesting solutions and allowing both parties to discuss their issues without being interrupted. Mediation still allows you to walk away if you are unhappy while keeping the information discussed confidential. Most commercial disputes are now settled through mediation as it provides a neutral and cost effective environment for finding a solution.

Although outside negotiation and meditation are an effective and amicable means of coming to a solution, you should always be prepared for conflict. Seek legal advice where the other party is not co-operating or the deal is not adding value to your business. If you reach out to a legal service at the beginning of a problem it will be easier for them to stay on top of your progress and advise on possible courses of action. Legal action may be particularly important where you require emergency relief (like an injunction to stop an action), a precedent needs to be set, the other party is intractable in negotiations or the other party commences the proceedings.

About the author:

Haley Graydon is a law clerk at Lynn & Brown.  Haley is currently in her final year of study at UWA.  The areas of law that Haley has a keen interest in is family law and estates.

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