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So if you fall out with someone you do business with, you have to sue them, right?

Wrong, or at least, not necessarily.

There are a lot of other ways you can deal with fallings out. For example, you can try to negotiate your way out of your difficulties. Negotiation is a completely flexible way of resolving any problems, and so you can make the rules (although it is always advisable to have these discussions on a without prejudice basis). If you can sort the problem out then there will be no harm to your reputation or the relationship with your customer/supplier.  You will also have been able to find a solution quickly and cheaply.

If negotiation does not work, or you think you need someone independent to sort the problem out then you could try mediation. With mediation, you are trying to resolve the problem without the involvement of the Court and with a third party who has no agenda and is not involved in either of the party’s businesses. The process is voluntary and is confidential, and so has the advantage of being private to you. The solutions that you may get to through either negotiation or mediation can be as imaginative as you like; they need not be simply money based.

Early neutral evaluation is a more formal process to resolve arguments. You and the other side can appoint an independent facilitator to review the merits of your positions and to tell you both how they think matters would end up if they went to Court. Any view given by the independent third party is not binding, but it may help to manage everyone’s expectations, especially if one of you is more stubborn than the other. It is confidential and can lead on to other things, such as a commercial negotiation. However, there are some disadvantages to going down this route. For example, if your customer/supplier is convinced they are right and this view is supported by the independent third party, then they may be even more stubborn when it comes to settlement. On the other hand, if they are unsure of their position, they may start questioning their approach and what they are doing if the third party comes down on your side.

If none of these work, then you may have to consider taking things further and suing, as this may help your position in further negotiations. However, things needn’t get that far.

Remember, if you have a problem with a customer or supplier, there are ways to work it out.

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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.