How can you avoid and manage the mental and business toll of business disputes?

“If that happens I’m done, I’m stopping!” Ed Sheeran is in the news again, defending an “insulting” claim of ripping off Marvin Gaye’s “Let’s Get it On!”.  He has previously spoken openly of the mental toll of high-stakes litigation. 

Expensive, stressful and time-consuming, you should avoid litigation, if you can.  Court delays and adjournments, unreasonable opponents, and the time needed to comply with court deadlines can take serious mental toll on the most robust.  The longer litigation goes on, the more frustrating and costly it can become.  Some studies have suggested that law firms should provide counselling and mental support for those going through the litigation process.  You will need colleagues and family to support you through the dispute process.

But what about the impact on your business?  Litigation can limit your ability to obtain funding, to grow or sell your business.  As part of any sale or investment process, you would need to disclose the existence of any litigation.  The presence of disputes can make your business appear unpalatable.   

Yet business disputes will be inevitable, how can you avoid litigation where possible, and manage any necessary litigation strategically, to further your business goals? 

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5 ways to avoid litigation

1. Don’t botch things, do deals on the back of an envelope, or operate on a handshake even if it is an industry norm or if you are an early-stage start-up.  You need clear, understandable written contracts and licence agreements that anticipate your business goals, and the risks and uncertainties around your relationships.  Initial expense ironing out details can save a fortune in time and energy dealing with disputes. 
2. If presented with agreements, don’t just hope for the best and sign.  Signing something you didn’t read or understand, won’t get you out of the contract when something goes wrong.  Get legal advice from lawyers who understand your business and industry.
3. Honour agreements.  Make sure you understand the specific terms of any contract and that everyone dealing with the contract understands what must be done to comply.
4. Consider setting out dispute resolution processes in any contracts.  Include provision to mediate or negotiate before going to litigation or arbitration.
5. If there is a problem, communicate, and seek legal advice as soon as possible.
   

Part two of our WABComment on ‘Avoiding and Managing Litigation’ will be available from Wednesday 10th May and will explore how best to manage litigation when it does arise. Follow us on LinkedIn to keep up to date with all of our latest insight pieces.

Roxanne Selby is a senior associate in our Litigation and Disputes Team. We undertake commercial litigation, arbitration and alternative dispute resolution, particularly regarding complex disputes over intellectual property and matters of contractual interpretation. Find out more.