Ways to re­solve a com­mer­cial dis­pute

Kapi-Mana News - - OUT & ABOUT - ALAN KNOWSLEY

Cash flow is the lifeblood of busi­ness, so a dis­pute that stops or de­lays a busi­ness get­ting paid be a se­ri­ous prob­lem.

Of­ten these dis­putes arise from not agree­ing at the out­set on the con­trac­tual terms that will ap­ply or not un­der­stand­ing the terms that have been agreed.

Hav­ing a good ‘‘Terms of Trade’’ that cov­ers what will be done, when, for how much, when pay­ment will be made and what hap­pens if there is a dis­pute is a vi­tal first step.

Pro­fes­sional ad­vice can help you get a good con­tract sorted ei­ther a one-off or a stan­dard form for mul­ti­ple use.

De­spite good Terms of Trade, dis­putes can still arise and the longer they are un­re­solved the worse the prob­lem gets as peo­ple’s views be­come en­trenched or they sim­ply lose in­ter­est in re­solv­ing the is­sue.

Dis­cussing the dis­pute with the other party in a friendly but firm way and sup­ported by the con­tract, notes of dis­cus­sions, copies of emails, in­voices and pho­to­graphs (if ap­pli­ca­ble) at an early stage is usu­ally the best way to re­solve mat­ters.

Hav­ing good doc­u­men­ta­tion, in­clud­ing signed and dated hand­writ­ten file notes, wins many ar­gu­ments be­fore they get started. It is a good habit to cre­ate file notes as you go – eg, in a note­book.

If a di­rect dis­cus­sion doesn’t re­solve mat­ters early on, es­ca­late the mat­ter ei­ther to a per­son higher up or by get­ting pro­fes­sional help. That pro­fes­sional may rec­om­mend a more for­mal di­rect ne­go­ti­a­tion with the other party as the next step.

With pro­fes­sional help the is­sues can be clearly iden­ti­fied and the sup­port­ing ev­i­dence pre­sented in the most help­ful way.

If di­rect ne­go­ti­a­tion is not suc­cess­ful, the next step could well be to bring in in­de­pen­dent as­sis­tance. This can take many forms rang­ing from an agreed ex­pert or a con­fer­ence of experts to a me­di­a­tion, ar­bi­tra­tion or court process.

An agreed ex­pert in­volves both sides agree­ing on a rel­e­vant ex­pert to as­sess the ar­gu­ments and reach a de­ci­sion. This is help­ful when there is a dis­pute over a tech­ni­cal is­sue both par­ties want re­solved so they can con­tinue to progress the com­mer­cial deal.

A con­fer­ence of experts is where each side has their own ex­pert and the experts meet and dis­cuss the is­sues to try to re­solve the of­ten tech­ni­cal is­sues be­tween them. They then re­port back on the out­come of the dis­pute.

A me­di­a­tion in­volves a per­son who has no de­ci­sion-mak­ing power as­sist­ing the par­ties. This can be done with­out pro­fes­sional

Le­gal mat­ters

ad­vice but of­ten in­volves le­gal as­sis­tance for each party.

An ar­bi­tra­tor has the power to make a de­ci­sion and of­ten the par­ties are legally rep­re­sented. It

An ar­bi­tra­tor has the power to make a de­ci­sion and of­ten the par­ties are legally rep­re­sented.

is a pri­vate process so there is usu­ally no pub­lic­ity. An ar­bi­tra­tion can of­ten be ar­ranged quite quickly.

The Dis­putes Tri­bunal can be used if the dis­pute is for $15,000 or less (up to $20,000 by agree­ment). The Dis­putes Ref­eree has the power to make a de­ci­sion. No lawyers are al­lowed in the hear­ing, but it is com­mon to get le­gal as­sis­tance in pre­par­ing the case be­fore the hear­ing.

For larger dis­putes a court process may be the most ap­pro­pri­ate res­o­lu­tion.

The court can make var­i­ous or­ders, such as in­junc­tions and preser­va­tion of prop­erty or­ders, as well as de­ci­sions that can be en­forced in New Zealand and over­seas. Column cour­tesy of Rainey Collins Lawyers, phone 0800 733 484 or rain­ey­collins.co.nz. If you have a le­gal in­quiry, email aknowsley@rain­ey­collins.co.nz.

There are many av­enues for re­solv­ing a dis­pute with­out need­ing to take the mat­ter to court.

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