11th Mar 2021

Five signs you are heading for a dispute

It is just about a given fact that at some point during the lifetime of a business a dispute will arise.  Whilst not all disputes can be avoided, if you know the early warning signs, you could then be better placed to resolve it at an early stage.  

Early resolution of a dispute will reduce the time and expense that you devote to it, freeing you up to focus on the business itself. So, what should you look out for?

1. Staff Issues

Staff issues or changes are not only a sign that not all is well with a business but can also later lead to a dispute. 

A change in staff, especially at high level, could mean that a business has internal management issues or that they have issues in dealing with you.  Whilst a business may not always divulge its reasons for a change in staff it is always worth enquiring, especially if the change is with staff you deal with directly.  A short email or telephone conversation may extract the reasons for the change and if it does not, at least you questioned it.  At the very least you could seek assurances that the issue is not with you.

A change of staff can also lead to a dispute later down the line when the new members of staff are either not up to speed or used to working with you.  The key here is both documentation and communication.  

It is good practice for email trails to be documented and retained in relation to any contract and where a new member of staff comes along you can seek assurance that they are up to speed from the outset.

2. Slippage

A slip in a timetable or failure to meet agreed timescales can be a major indicator that a dispute is in the pipeline or could be the dispute itself.  

Sometimes, there can be a plausible explanation, like a business is waiting for a third party, but other times it can be a clear sign that they are not going to fulfil their part of the contract.

Again, the key here is prompt and clear communication.  As soon as a delay occurs speak with them to ascertain what has caused the missed deadline and to agree a plan to resolve it. 

Whilst your legal team will always want to see a paper trail, emails can be impersonal and ignored.  It may therefore be better to meet face to face or at least have a telephone conversation.  You should then follow that up with a clear and succinct email setting out the agreed steps. 

3. Silence

Silence or lack of communication is one of the biggest indicators that a dispute is looming.  Time after time companies decide the silent treatment is the best option when a contract is not being performed to their liking. 

This is really not the best option and can result in litigation commencing before all avenues of negotiation and settlement have been explored. 

If a business refuses to respond to you then make sure you offer them one last olive branch, either a meeting together or a request for any issues to be put in writing might just break the deadlock.  

4. Squabbles

Small or trivial complaints from a business can also be an early indicator of a potential dispute.  

Whilst the odd small complaint or comment here or there may seem like nothing and best ignored, they can sometimes have the snowball effect and build up to a major dispute and breakdown in the business relationship. 

Whilst it can be very time consuming addressing every issue raised by a needy business it is often better to address these small complaints before they escalate. Again, the key is communication and documentation.  Speak to them about the issues and follow up your response in writing. 

You could even address the volume of their complaints at the same time by setting out clearly in writing how issues should be communicated and how you intend to respond them.

5. Stubbornness

A business that suddenly becomes awkward or unwilling to compromise can be sign of a dispute looming.

Not every contract will go according to the agreement and when issues arise it is vital that the trading parties sit down and address them at an early stage rather than avoiding the issue and burying their heads away. 

It is far better to vary a timetable or agree a change of material or course of action than let an entire contract fail to complete.

Natasha Guest is a Senior Associate in Berwins' Dispute Resolution team.  

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