Common causes of commercial litigation – and how to guard against it

Categories: News

At ORJ, we have more than 30 years of commercial litigation experience, dealing with cases ranging from minor disagreements between companies to complex, multi-million-pound disputes.

Often, we can help businesses resolve disputes amicably but there are also occasions when we must represent our clients in court.

But prevention is better than cure, as the old adage goes. Here are some of the most common disputes – and how to save money (and headaches) by avoiding them.

Breach of contract

Breach of contract is when one party fails to fulfill their obligations under a legally binding agreement. This includes non-payment, failure to deliver goods or services or failure to meet deadlines.

ORJ was called into action when a UK Plc company breached its contractual obligation, leaving our client with a £40,000 loss. 

We quickly and efficiently negotiated full and immediate payment – and the agreement was written and signed at the end of the first meeting.

Breaches will always happen but the best way to guard against them and protect your business’ interest is to have a well-defined, clear contract that includes provisions for dispute resolution. Engage an experienced solicitor during the drafting process and carry out regular reviews.

Employment Disputes

Disagreements over employment contracts, unfair dismissal and discrimination claims often lead to commercial litigation. As any business that has been embroiled in employment disputes will attest, these matters can be time-consuming, costly and reputationally damaging, particularly if they reach an Employment Tribunal.

It’s important that employment contracts are professionally drafted within the framework of the latest UK employment law. Legislation is changing all the time, so regular reviews are essential. Try to promote a company culture where disputes can be discussed and addressed internally before litigation is required.

Partnership Disputes

Many businesses are owned by partnerships and, if the relationship turns sour, significant litigation can occur. There are many reasons why a lawyer may need to advise on a fall-out, but the most common issues are disagreements over profit-sharing, the direction of the business or the duties of the partners.

Partnership agreements are vital – even if the relationship is strong at the start. The agreement should outline the roles, responsibilities and expectations of each party so everyone knows where they stand, along with dispute resolution mechanisms as a safeguard.

Shareholder Disputes

Private companies can have multiple shareholders and disputes can often arise if some of those with a stake in the business disagree over governance, dividend distribution or control. We often see allegations of mismanagement and it can be a complex area, particularly if there are many minority shareholders.

Shareholder agreements can help add clarity by outlining voting rights, as well as laying out the procedure for buying and selling shares, amongst other things.

Companies are advised to communicate regularly and transparently with shareholders so they do not feel either left in the dark or surprised by a business decision.

Intellectual Property Disputes

Intellectual Property (IP) refers to legal rights that protect creations of the mind, such as inventions, artistic works, designs, brand names and trade secrets. IP disputes usually involve allegations of IP theft, infringement or unauthorised use of trademarks or patents.

They commonly occur in the technology, media and manufacturing sectors.

Watertight trademarks, patents and copyrights are key, but so are contracts around IP, particularly if third-parties or employees are privy to commercially sensitive information.

If you find yourself in a commercial dispute and litigation is a possibility, it’s important you seek swift professional advice. We have decades of experience helping businesses big and small resolve disputes cost-effectively – whether they are bringing the action or defending.

Our industry-leading litigators will take the time to understand your unique circumstances and will guide you on the best course of action, avoiding the time-consuming possibility of court whenever possible.

Get in touch today to begin the process.