Thankfully, when two or more parties can’t agree on a particular issue, dispute resolution becomes necessary and can provide straightforward guidance on what to do next.
When dispute resolution process is unsuccessful, businesses may need to resort to legal action to resolve the issue. But let’s try and avoid by knowing more about dispute resolution and how to deal with it in an effective manner.
Examples of common disputes
There are many reasons why businesses may find themselves in dispute. Some frequent cases include:
- disagreements with customers or suppliers.
- problems with council or local government.
- issues with employees, including discrimination, harassment, or unfair dismissal.
- breach of contract by another party.
What are the main types of dispute resolution in Australia?
There are four main types of dispute resolution that businesses may explore in Australia. They are:
Negotiation
Negotiation is the process of communication between two or more parties with the aim of reaching an agreement. It can be used to resolve disputes at any stage, including before a dispute arises.
Mediation
Mediation is a dispute resolution process where an independent third party (the mediator) helps the parties to reach an agreement. The mediator does not make decisions and cannot force the parties to agree.
Arbitration
Arbitration is a dispute resolution process where an independent third party (the arbitrator) makes a decision that is binding on the parties. This is a level up from mediation but has the benefit of keeping you out of court.
Litigation
Litigation is the process of taking a dispute to court. This is usually a last resort option when other dispute resolution methods have failed. It can be really costly especially when a decision goes against you.
The benefits of using a professional mediator or arbitrator
There are many reasons for considering a professional mediator or arbitrator. The most important consideration is getting impartial and objective advice. Not only that, advice from a professional who has specialist expertise in dispute resolution can be a plus.
An independent party can also help both sides communicate effectively and assist with the exploration of different options for resolution. A third party may be able to provide expert advice according to specific industries as well, for example, retailing.
Choose the right type of dispute resolution for your business
The type of dispute resolution that is right for your business will depend on the nature of the dispute, the relationship between the parties, and the resources available.
Some factors you may wish to consider include:
- The time it will take to resolve the dispute.
- The cost of dispute resolution.
- The likely outcome of the dispute.
- The impact of the dispute on your business.
- Your relationship with the other party.
It’s best to get professional advice if you’re not sure about which method to use. Speak with one of the team members at Lakis & Knight if you want to know which option might be best for you.
Tips for effective dispute resolution
There are a few things you can do to improve the chances of dispute resolution being successful. Some tips include:
- Identifying issues early and trying to resolve them informally.
- Keeping communication channels open between all stakeholders.
- Being clear about what you want to achieve internally.
- Understanding the other party’s position and showing empathy.
- Exploring different options for resolution as described above.
- Getting legal advice for really complex disputes or where a large liability looms.
- Make sure you have all the relevant information and documents to support your side of the story.
How to spot red flags for potential litigation
There are red flags you can look out for which may indicate that a dispute is headed for litigation. These include:
- One party refusing to negotiate or participate in dispute resolution.
- The other party making demands that are unrealistic or unachievable.
- Threats of legal action being made by either party.
- Unreasonable timeframes being set by either party.
Take action to avoid ending up in court
Effective dispute resolution can save time and money, and it can also help protect relationships between businesses. If you need help resolving a dispute, consider using a professional mediator or arbitrator.
We offer free consultations so you can find the right solution for your business. Get in touch with us today to get started.
