Everything you need to know about commercial disputes

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Date: 29 July 2021

A business man tears up a contract in a commercial dispute

Commercial disputes are a part of the Alternative Dispute Resolution process and are civil in nature. You could find yourself in a dispute as a result of a deal, contract, or transaction. You must respond to the dispute notice quickly and engage with legal professionals. In this article we will look at how a commercial dispute can arise, the process for resolving the dispute and any possible recourse for the losing party.

Introduction to commercial disputes

As mentioned earlier, commercial disputes arise when parties to an agreement fail to perform their duties. However, this is broad definition, and there can be multiple variables involved that lead to the initiation of a commercial dispute.

The term "commercial dispute" is a blanket term, and it covers a wide variety of legal issues. These can include disputes over contractual agreements, competition disputes, professional insolvency, fraud, partnership disputes, etc.

The court will appoint a dispute resolution professional who will oversee the entire resolution process. If a dispute reaches court, the court tries to resolve it by establishing robust communication channels between the various parties.

However, when the parties fail to reach a middle ground amicably, commercial disputes are seen as the last resort.

It is noteworthy that the dispute can arise between two individuals or two large corporations. Wealthy business sectors such as construction finance can also be a party to the dispute. Therefore, you must be mindful of business law before engaging in the dispute proceedings.

Requirements for enacting a commercial dispute

Enacting a commercial dispute in the UK is quite straightforward. Since it is considered a last resort, the procedure starts by proving that you have exhausted all the alternative channels before going to court. However, this is just a general rule, and the requirements differ depending upon the subject matter of each case.

Next, you must ensure you have a legal basis for making a claim, for example as a result of the other party's negligence or incompetence. Once you have established a claim, your legal professional will complete your claim form and send it to the relevant court. UK courts are divided into small claims, fast track and multi-track depending upon the value of the claim.

In most cases, the dispute is resolved in less than a day. When the court takes cognizance of the claim form, it issues an "order of directions." This order contains all the relevant information regarding the conduct of your case.

It includes information such as documentary requirements, the timetable, due process, etc. If there are any other requirements specific to your case, you will find them in the order of directions. When all the aforementioned requirements are met, your case is listed for the concerned judge to adjudicate.

Procedures

Commercial disputes are composed of three steps:

  • Pre-litigation: Pre-litigation is when you determine that the issue between you and the other party has reached a point where it needs legal action. Now, you have to collect digital and physical evidence to support your claim and establish a communication channel with the other party. Subsequently, you may work with your commercial solicitors to write to other legal bodies to show that you have taken all the alternative routes.
  • Case preparation: This is the stage where your solicitor assembles all the required forms and calculates the litigation cost. It also involves the drafting of a response to the defendants, if any. The solicitor will also note the court's "order of directions" and arrange all the necessary documents. Lastly, there will be witness preparation to support your case even further.
  • Enforcement: On judgment day, the solicitor will prepare you for court testimonies, ensuring that you are fluent with your statements. The solicitor will also articulate his arguments and ensure that they are clear and effective. The dispute resolution hearings are done in public by a barrister. Upon conclusion, the judge delivers a ruling which is displayed in the public domain in 21 days.

Results

Depending upon the nature of the claim, the entire resolution proceedings can last anywhere between six and 12 months. Once the court passes the ruling, it is deemed effective immediately. However, if the losing party is the debtor, he may be given an extended period to comply with the orders.

You must understand that legal victory and financial victory are mutually exclusive, so you must be certain that the other party is able to pay any damages you are awarded.

Copyright 2021. Article was made possible by site supporter Charles Noakes, Summit Law LLP

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