What is a Commercial Dispute ?

A commercial dispute is any dispute that arises between two companies or businesses. Its cause varies but the vast majority of commercial disputes are down to:

• Non-payment for goods following delivery
• Non-completion of a project resulting in loss of income
• Delivery of unsatisfactory goods or workmanship

As a business owner you could be the party making a claim against a supplier or the party being claimed against. Either way, the route taken by a commercial dispute depends on several factors, including the size of the claim, the strength of the case and whether there is a dispute settlement clause written into your contract.




Claiming via a commercial dispute

Commercial disputes can be stressful, upsetting and costly for both sides so you need to consider whether the potential outcome is worth what you will need to put into the claim. For example, a small claim against a company you know can’t pay will be more hassle than it is worth in the long run. A large claim against a substantial company though is more likely to produce a result and is often worth pursuing.
There are four main methods used to resolve commercial disputes. These are:

1. Negotiation – this should always be the first line of attack because it can save a lot of time and money later on.
2. Mediation – this involves using a neutral 3rd party to help find a solution to the dispute. Any solution that is decided upon isn’t legally binding though so either party can back out at a later date.
3. Arbitration – again this uses a neutral 3rd party but the difference here is that both parties in the dispute agree to be bound by the decision made by the 3rd party. Arbitration is sometimes conducted in a court setting and is voluntary.
4. Litigation – litigation should be the last resort as it involves a court case in the local court. Litigation court cases can cost thousands of pounds in costs, and so the claim needs to be substantial to make this method viable.

In most cases, the commercial contract between two companies/businesses will include a dispute settlement clause. This will outline the procedure to be taken if a dispute ever arises. If there isn’t a clause though then the rules of International Private Law will be used to decide what type of resolution method will be applied to the dispute i.e. arbitration in an arbitration court or litigation in a local court.


What to do if you get involved in a commercial dispute

Commercial disputes are often resolved before the need for litigation arises but if they aren’t it can spell disaster for small businesses or companies. If you do find yourself involved in a commercial dispute – regardless of whether you are the one claiming or the one being claimed against – you need to seek professional advice from the start.

By using the services of a commercial dispute lawyer you might be able to resolve the issue before working relationships break down altogether, and before you lose everything you have worked so hard to achieve. 

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