Commercial disputes

Commercial disputes can become expensive very quickly if the parties start arguing before anyone has properly worked out the facts, the documents and the commercial objective.

My starting point is usually simpler: what happened, what does the agreement actually say, what can be proved, what does the other side realistically want and what outcome would make commercial sense?

The disputes RWS can help with

RWS can assist with disputes involving:

• breach of contract;
• unpaid sums;
• termination;
• misrepresentation;
• guarantees and indemnities;
• breakdowns in business relationships;
• shareholder and joint venture disagreements;
• settlement agreements;
• contractual notices;
• disputes with an international element; and
• other substantial commercial disagreements.

Questions I am often asked about commercial disputes

• What should I do first when a commercial dispute starts?

  Before deciding what letter to send or what claim to threaten, I would usually want to reconstruct what actually happened.

  That normally means finding the contract and any later variations, creating a proper chronology and identifying the communications and documents which matter.

  I then want to understand four things: what obligation is said to have been breached, what can actually be proved, what loss or consequence followed and what outcome the client wants now.

  That sounds simple, but a surprising amount of money can be spent in disputes before those questions have been answered properly.

• I have received an aggressive solicitor’s letter. Do I need to respond immediately?

  The deadline should not be ignored, particularly if the letter raises an urgent issue or refers to proceedings.

  That does not mean the substantive response should be written in a rush.

  Before responding I would want to understand the allegations, the important documents and whether anything said in response could unnecessarily concede a point or commit the client to a factual position which has not been checked.

  Sometimes the right immediate response is a detailed answer. Sometimes it is a short holding response while the position is investigated properly.

• What documents should I preserve once a dispute begins?

  Preserve more rather than less.

  That will commonly include the contract, amendments, emails, WhatsApp or other messages, invoices, payment records, meeting notes, internal documents, drafts where relevant and records showing what work or performance actually took place.

  Do not delete a document because it appears unhelpful.

  A dispute is not helped by preserving only the material which supports one side’s preferred narrative. The difficult documents need to be understood as well.

• How do you assess whether a commercial claim is strong?

  I do not think it is enough to identify an arguable legal point.

  I would usually look separately at liability, the evidence available to prove the relevant facts, causation, the loss or remedy claimed, any contractual limitations, possible counterclaims, enforcement and the cost of pursuing the matter.

  A case can be legally attractive and commercially unattractive, or commercially valuable but evidentially difficult.

  The useful question is not simply ‘can an argument be made?’ It is ‘what happens if this is actually tested?’

• Should I try to settle or mediate?

  There is no rule that a strong case should never settle or that a weak case should always settle.

  I would compare the realistic litigation outcomes with the cost, delay, management time, enforceability and commercial effect of continuing.

  Mediation can be particularly useful where the dispute is capable of a commercial solution which a court would not necessarily impose.

  The civil procedure rules also place real emphasis on proportionality and ADR. Parties are expected to consider settlement before and during proceedings.

  The important point is to negotiate from an informed position rather than simply splitting the difference because litigation has become uncomfortable.

• Can RWS help before proceedings have been issued?

  Yes.

  A significant part of RWS’s work can take place before litigation begins: reviewing the documents, analysing the legal and factual position, preparing or reviewing pre-action correspondence, considering evidence, formulating settlement strategy and deciding what should happen next.

  Where no specific Pre-Action Protocol applies, the Practice Direction on Pre-Action Conduct and Protocols expects parties to exchange sufficient information to understand each other’s positions, consider settlement and ADR and narrow the issues.

  The aim should be proportionate preparation, not producing a trial bundle before a claim has even been issued.

• Can RWS help once court proceedings already exist?

  Potentially, yes, but the distinction between reserved and non-reserved work becomes important.

  RWS can assist with non-reserved work such as reviewing the strategy and evidence, analysing documents, preparing chronologies and factual material, considering settlement and helping prepare papers for counsel or an authorised litigation team.

  RWS does not conduct litigation, go on the court record or exercise rights of audience.

• How much should a commercial dispute cost?

  There is no sensible universal answer.

  The cost depends on what is at stake, the volume of documents, the number of parties, whether expert evidence is needed, the procedural stage and how the other side conducts the dispute.

  What can be controlled is scope.

  Where possible, I prefer to identify the immediate task and agree what actually needs to be done before work starts. Some clients need one piece of drafting. Some need a strategic review. Some need continuing support.

  The fact that a dispute could generate a large amount of legal work does not mean every available step is worth taking.

Legal framework: Civil Procedure Rules and Practice Direction – Pre-Action Conduct and Protocols.

Is RWS the right fit for a commercial dispute?

The fact that a matter may eventually require litigation does not necessarily mean every part of the dispute has to be handled through the same structure.