Word of budget written on a blackboard

By litigation, we mean civil disputes about money or assets. These disputes can be ferociously expensive. Legal costs by way of an extreme example in a recent case*  reportedly exceeded £100 million.

Few of us of course will litigate on this scale. But of course, if it is possible to make the litigation services you have to buy less expensive, then business prudence would always favour doing so.

This is not a question of finding a cheaper solicitor, but rather running your business in such a way that litigation may be avoided altogether or settled earlier because your business is a tight ship.

So what can you do?

  • Make sure you have term and conditions of trading and ensure that they are actually governed or agreements
  • Keep a clear chronological record of how each contract came into being
  • With advance planning exclude liabilities where you can and limit liability to consequential loss
  • Keep the terms up-to-date
  • Look at putting in place before the event legal expenses insurance. It is surprisingly affordable and gives you very significant leverage in negotiation if you do get into a dispute
  • Maintain clear credit insurance and adhere carefully to its terms. Make sure that the cover will provide what you want, getting a provider by recommendation
  • If you process discipline in your contracting it tells your opponent you will not give up and gives you still more leverage in negotiating in the dispute
  • Make sure you have a risk manager. This is the person who maintains records of contracts, insurance and your business’ communications. This does not need a new employee. Consider negotiating broadening the role of the most appropriate staff member
  • Make sure you have a clear audit trail with dealings with your suppliers and customers. Lack of adequate records is a big problem when it comes to a dispute. All verbal communications should be followed up in writing, all meetings should be minuted (even briefly). Some record is always better than no record!

Putting in place these straightforward risk management systems will repay dividends in legal costs and, more importantly, avoiding getting into disputes or, if you do getting them, settled early.

Part 2 of our guide to making litigation cheaper will uncover a few home truths and engaging your solicitor.

For more information, email blogs@gateleyuk.com.

*Berezovsky v Abramovich


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.