Building Bridges
How to Stay Out of Court
Ideas for reducing the risk of ending up in Court, and building bridges, include the following.
Negotiation and Contract
Deal with people with similar values, at least insofar as they relate to business dealings, such as communication, honesty, and commitment.
Develop and maintain a healthy relationship with your business partner(s) throughout the association, through regular, open and effective communication.
Building Bridges
Comprehensively explore specific expectations before entering into a commercial arrangement.
Record those expectations in a well thought-out, well drafted contract, developed through constructive negotiations and open communication.
Consider including in the contract dispute-related provisions designed to avoid, or at least reduce, the need to go to Court, such as exit clauses, mediation clauses, expert determination clauses, “penalty” clauses (for liquidated damages), “shotgun” clauses, drag along and tag along provisions, forced sale on specified breaches after notice, pre-emptive rights and so on.
Enlist the services of an experience commercial lawyer to assist you with the contract, and even with negotiations.
If a Dispute or Disagreement arises
Try to resolve the matter quickly out of Court. It’s important to ensure that out-of-Court discussions are off the record and “without prejudice” (i.e., can’t be used in Court) – get legal advice as to how this is best achieved. Adopt a constructive approach and keep an open mind. Do a “reality check” – try to see things from the standpoint of the other party(ies), and tailor proposals and discussions accordingly.
Consider obtaining legal advice, preferably from a commercial, resolution-oriented lawyer (rather than a combative litigator). Would you ask a surgeon to give advice on non-invasive treatment?
If a settlement is reached, ensure its terms are recorded in writing.
If discussions don’t lead to a resolution, consider triggering dispute-related clauses in the contract (if any), such as exit clauses and the other types of provisions referred to above. Obtain legal advice on this.
Whether or not it is provided for in the contract, consider mediation. It ensures that discussions are off the record and “without prejudice” (i.e., can’t be used in Court). The mediation process (when run by an accredited mediator) is specifically designed to facilitate constructive discussions, and having a third party (mediator) present helps with this. A mediator, being an impartial outsider, can help you do a “reality check”, and help you to see things from the standpoint of the other party(ies), and to tailor proposals and discussions accordingly. If a settlement is reached at mediation, the mediator can help you to record it in writing.
If you do decide to use a mediator, when it comes to choosing a mediator, it is recommended that you search the National Register at https://msb.org.au/mediators to confirm that the mediator has current NMAS accreditation. This provides reassurance that the mediator has been trained and assessed to the national standard, holds current professional indemnity insurance, maintains a threshold of experience and professional development, and importantly, has an independent complaints-handling mechanism.
Rod Stumbles is a multi-disciplinary mediator & online mediation specialist, accredited under the Australian Mediator Dispute Resolution Accreditation Standards (AMDRAS), with a focus on business disputes.