Disputes are rather unavoidable in business due to difficulties and divergences in communication, expectations and understanding.
However, it is crucial to manage disputes properly as they can become expensive, time-consuming and even destroy the value of the business, should they become protracted. Handling them well also leaves open the possibility of future business ventures with the counter-party or at the very least, allows for leveraging of the counter-party's connections.
Indeed, basic preventive measures such as the drafting of contracts in clear language, and avoiding vague terms that leave little room for doubt, can be taken to reduce the occurrences of disputes. But, we will not focus on these issues here as they can be easily taken care of with the help of a competent lawyer. What is in fact more crucial and difficult is the managing of a brewing dispute which may, unfortunately, be inevitable. The following, whilst not exhaustive, are borne from practical experience on how disputes can be resolved amicably:
What not to do
The most crucial factor which one should bear in mind, whether the dispute is between two individuals or two companies, is that there is an unavoidable human element to dealing with disputes. In fact, the court battles are often triggered due to the often unnecessary and premature sending of nasty emails threatening legal action.
Choosing the right representative
Choosing the right person in your organisation to liaise with the other party from the start is imperative. This person ought to be able to put the interests of the company first, and have the maturity and experience to navigate and handle human relations without escalating the dispute by aggravating the problem. Admittedly, they have a rather unenviable task of straddling the precarious line between safeguarding the core interests of the company they represent and being flexible enough to understand the other party's interests, but the chosen representative should be able to handle the situation with skill and care.
Arranging a Without Prejudice meeting
A mediation clause (which we suggest should be inserted as a compulsory mode of dispute resolution) would require both sides to attempt mediation before proceeding to court or an arbitration should a conflict arise. However, one should not discount the great benefit of a party taking the initiative to arrange a Without Prejudice meeting to give both parties a chance to ventilate their grievances - this could even take the form of a chat over coffee or a telephone call. Whether or not this resolves the dispute, such a meeting will have a cooling effect on the heat generated by the conflict, leaving room for rational discourse.
These initiatives, while seemingly simple, have proved to be incredibly effective methods in managing disputes.