When the possibility of a dispute or potential claim rears its head, many businesses do not understand where to turn.
Nick Lambert, chairman and litigation solicitor at Wake Smith, looks at the practical steps to take when this arises.
He said: “Whether started by the business or brought against it, disputes are an unwelcome, but inevitable, feature of business life. When they develop they can be time consuming, costly, commercially destructive and stressful.
“Whilst there is no substitute for seeking legal advice as soon as possible from one of our specialist litigation solicitors, there are steps which any business can take which are likely to improve its position in relation to the dispute.”
First steps:
- If the business receives any formal documents requiring a response within a specified time, take legal advice from us immediately.
- Do not leave everything to the last minute. There are time limits which a business will need to comply with. Ensure the business knows which time limits apply; and has enough time to comply with them.
- Avoid talking to the other party without speaking to us first. It is important to avoid saying something that may be used against the business at a later date.
- Do not admit anything, or agree to settle, without taking legal advice from one of our lawyers.
- If the business is forced into a discussion without legal advice, do not admit anything or agree to settle.
Communication channels are an important consideration.
- Limit internal discussions to those with a real “need to know”. However, ensure that anyone within the business with day-to-day contact with the other party is aware that there is a potential dispute.
- Do not communicate with any external party for example, a trade association, without taking legal advice. Do not send documents relevant to the case to external parties or ask them to send them to the business without taking legal advice from us.
- Do not destroy, delete or amend any relevant documentation or media containing information relevant to the case for example, notes of conversations, diaries, e-mails, photographs or tapes.
- Suspend any routine destruction process that the business may have in place.
- Ensure everyone with access to information relevant to the case is immediately notified not to destroy it and to be careful when creating new documents.
Be careful when discussing a potential dispute or preparing a report on an incident.
Nick said: “Businesses may have to show embarrassing or damaging documents to the other party or the investigating body as part of legal proceedings. Therefore, always consider whether a written document needs to be created.
“Think about what is being recorded and how it would appear if it was read out in court. Take legal advice from us first if it is likely to contain confidential or sensitive material.
“Never speculate, offer opinions or make critical remarks: simply stick to the facts and remember that e-mails are documents, just like letters and only send the document or e-mail to those who really need to see it.
“A business may have to implement improvements or changes in practices following an incident, implicitly showing that previous practice was flawed. Take legal advice from one of our litigation lawyers to find the best way to do this without prejudicing any possible litigation.”
Communications between a business and its legal advisers do not usually have to be shown to the other side or regulatory body. They are protected by the legal concept of privilege and the lawyer’s general duty of client confidentiality.
Nick added: “However, some communications are not protected. For example, business advice given by a legal adviser or documents drafted by employees to provide information to the legal advisers so they can give legal advice. Marking a document “privileged” or “confidential” or copying it to a lawyer does not, in itself, make it privileged or confidential.
“Privilege and confidentiality can be lost if the privileged or confidential information is distributed or copied too widely. Only circulate it on a real “need to know” basis and never copy it externally without taking legal advice from us beforehand.”
“Also, check the business’ insurance policy to see if it is an insured claim. If it may be, notify the insurers immediately and follow their claims procedure, otherwise the insurance claim could be invalidated. The business may need to get the insurance company’s consent before taking any action.”
Establishing the case is crucial, adds Nick.
- Evidence - Locate and preserve any relevant materials as soon as possible.
- Witnesses - Identify anyone who may be relevant to the case and, therefore, may have to give evidence. Are they still employed by the business and, if not, can they be traced? Contact us immediately if there is any reason why any witnesses might not be able or willing to give a statement for example, if they were dismissed or are ill.
- Other parties - Tell us if there is any other party who may be liable or should be involved in the case for example, was the disputed work sub-contracted?
- Assets - Inform us if the other party may consider disposing of its assets so that it cannot pay if it loses. A business may be able to obtain a court order to secure its claim. Also, consider where the other party’s assets are located.
- Management time - Keep a record of management time taken by the dispute.
Nick concludes: “Here at Wake Smith our litigation lawyers do nothing else apart from advising and representing businesses, and individuals, involved in disputes. Tapping into that expertise as soon as any potential dispute rears its head, makes sense.”
For further advice contact Nick Lambert at [email protected] or call 0114 266 6660.
