5 Things You Need to Know About Disputes and Litigation
1Legal disputes can be costly, time consuming and draining for a business. It’s always wise to look out for opportunities to resolve a dispute on commercial terms, rather than going to court. If you’re involved in a dispute, try to work with a lawyer who understands that litigation isn’t necessarily the best option.
2If you have a simple claim against another party (for example, someone owes money to your business), a common first step is for a lawyer to draft a “letter of demand”. This letter sets out the details of your claim against the other party, the legal basis for the claim and the action you will take if the claim is not resolved. A letter of demand can also include an offer to settle the dispute with the other party through a commercial compromise. For example, if you are owed a debt of $75,000, you may be willing to accept payment of $70,000 to avoid a drawn-out debt collection dispute.
3After receiving a letter of demand, the other party may ask a lawyer to respond with a letter outlining their position. After that, the parties may negotiate and try to reach a commercial resolution that takes into account each party’s position. If the dispute doesn’t settle through negotiations, the party with the claim will consider whether to progress the dispute to litigation by filing an initiating process in a court or tribunal. An initiating process or statement of claim is a document that sets out the case of the party with the claim (referred to as the “plaintiff” or “applicant”). The other party (the “defendant” or “respondent”) should then file a “defence”, a document outlining their position in the dispute.
4Court documents (like a statement of claim or a defence) need to cover all the important legal elements of a party’s case in a dispute. These documents must also be prepared in the correct form for each court or tribunal. If you’re involved in litigation, it’s best to work with a specialist lawyer who can draft your court documents in the proper form.
5Even if your dispute ends up as litigation, it may still be a good idea to settle before the court hands down its decision (a judgment). An experienced disputes lawyer or barrister can advise you on the progress of your case and whether you should consider settlement.