Civil litigation & ADR FAQs
Q1: My business has been severely affected by a supplier’s failure to honour the contract terms we agreed. What can I do about it?
A: It is a fact of life that business disagreements occur, even in business relationships that have been formed over a length of time. Sometimes resolving the dispute is straightforward, sometimes it is more complex.
Knowing what you can do when things go wrong not only makes business sense, but can limit any disruption to your business caused by the dispute.
Litigation could be an answer, but litigation may not be the right first choice for your business, particularly if you want to continue with a business or personal relationship with the party with whom you have a dispute.
There may well be other options to litigation. Mediation or other forms of alternative dispute resolution for example, may be more appropriate to your particular circumstances.
On the other hand, the agreement to which you are a party, may specifically stipulate how disputes are to be resolved. If you think that a dispute is likely to arise, or it has already arisen, it could be prudent to have the contract examined before deciding on a course of action.
However you decide to act or if the contract stipulates the route you initially have to take, it is essential that you make informed decisions. At Libra Solicitors we believe in giving you clear, practical advice so you can do just that. For a confidential discussion about the issues that may be concerning you, call us on 01223 632420 and let’s see how we can help you.
Q2: What are the pros and cons of mediation?
A: Mediation is a common type of alternative dispute resolution (ADR). Some of the potential benefits of engaging in mediation are as follows:
- The non-confrontational nature of mediation, and the involvement of both parties in finding a resolution to the dispute, can preserve a relationship between the parties.
- Mediation is a voluntary process which both parties have to agree to.
- The parties may have already agreed to mediate in the event of a dispute, for example contract provisions may have included a mediation clause.
- Failure to consider an offer to enter into mediation of a dispute (or some other form of ADR) may have cost consequences if the matter proceeds to litigation.
- Mediation is generally cheaper and quicker than litigation.
- The parties to a dispute can agree to mediation at any time, even if litigation has already begun.
- Mediation is confidential, so any information that is revealed during the process will not be available to the court if mediation is unsuccessful and the matter proceeds to litigation.
- The confidential nature of mediation can be important if the dispute involves trade secrets such as valuable intellectual property.
- The confidential nature of mediation means that both parties can avoid the negative publicity and reputational damage that might occur if the dispute leads to litigation.
- The parties can select a mediator who is experienced in the area of dispute, who can assist both parties in getting to the core issues in dispute.
- Mediation allows the parties to see the strengths and weaknesses of each other’s cases. This can encourage the parties to take a more pragmatic view on their chances of success in litigation and the desirability of reaching a settlement of the dispute.
- Each party gets to give their own version of events in a non-confrontational environment, with an emphasis on problem-solving rather than apportioning blame. This can encourage a common sense approach where the parties actively attempt to resolve the dispute in a way that is acceptable to both.
- The mediator can facilitate this understanding by drawing out the real issues of the dispute, and by helping the parties to understand what they would regard as an acceptable resolution of the matter. This can encourage some level of compromise.
- The parties retain control over any settlement of their dispute, which can allow them more creativity in finding an appropriate remedy for any damage done. For instance, in a contractual dispute the injured party might be given preferential terms of business with the other party, whereas the remedy options available to the court are more limited.
- The mediator does not have the final say in whether the dispute is to be resolved. It is for the parties to come to an agreement. If they do not, then both parties may walk away.
However, mediation may not always be suitable. The following are examples of situations where it may not be advisable to engage in mediation:
- One or both of the parties may be completely unwilling to cooperate or compromise.
- If mediation appears unlikely to succeed, it may not save the parties time and money.
- The parties may be waiting for crucial expert evidence. For instance, a report that will determine liability without which any attempt to mediate may be premature.
- A complex matter of law may need to be ruled on in order for the dispute to be settled.
- There may be an urgent need to initiate litigation, such as in cases were an emergency injunction is the primary remedy that is being sought.
- One of the parties may be eager for public disclosure of the facts of the dispute.
- One of the parties may feel their case is so strong that they can apply for a summary judgement.
- One of the parties might have doubts about whether the mediation agreement can be enforced.
For a confidential discussion about mediation or other forms of alternative dispute resolution and how we could help your business, call us on 01223 632420 and arrange an appointment.
Q3: A company with which we do business has breached our contract and I’m not sure that damages will help. Are there any other remedies that might be available?
A: Usually the innocent party to a breach of contract will receive damages from the breaching party to put them back in the position they would have been if the contract had been performed correctly.
However, the damage done to your firm by the breach of contract could be difficult to quantify, and some of the consequences that flowed may be considered too remote. This can mean that not all damages will be recovered.
If the court does not feel that damages are a sufficient remedy to the breach, the court can make other orders of disposal to ensure an equitable outcome for the wronged party.
Such methods of disposal include specific performance and rescission, although an order for rescission may be difficult to achieve as it may no longer be possible to put the parties back in the place they were before the contract was made.
If you are involved in a contract dispute or are considering litigation because of a breach of contract, our expertise could help you. For a confidential discussion about the issues that are concerning you, call us now on 01223 632420 and arrange an appointment.
Q4: I verbally agreed with another business to carry out work for them. Does our agreement constitute a binding contract?
A: An oral agreement can be legally binding providing the basic requirements for a contract have been met. However, contract law can be highly complex. In this instance you may well have entered into an oral contract that is binding, though whether or not a contract exists, would depend on the exact circumstances of your situation.
In trying to establish whether or not a binding oral contract exists, the courts have to deal with the issue of establishing the terms of the contract. The exact terms of the contract may be hard to evidence, so where appropriate, the court may examine the conduct of the parties after the alleged agreement was made, in order to determine whether or not a contract exists and what the terms of the contract are.
Although oral agreements can be legally enforced in the courts, we advise our clients that it is best practice to have a written contract as we believe a concise and straight-forward written contract allows confidence in the relationship to grow as the parties to the contract know what is expected of each of them. The contract can even provide for how any disputes that do arise are to be resolved.
Some types of contract are required by law to be in writing, for example, a consumer credit contract. In addition, any contract that contains a guarantee needs to be in writing to be legally binding.
The requirements for a basic contract are as follows, and are fairly self-explanatory:
- Consideration (a mutual exchange of something of value between the parties)
- Intention to create legal relations
- Certainty (of the terms of the contract)
Please note however, that the individual making the contract must also have the capacity to do so. Special rules apply to minors and people who do not have the mental capacity to enter into contracts.
For a confidential discussion about contracts and the issues that are concerning you, call us now on 01223 632420 and arrange an appointment.