Exploring ADR for Business Disputes
Commercial disagreements can drain time, money and relationships. How negotiation, mediation and arbitration can help businesses resolve disputes privately.
Liberty ADR Centre · · 2 min read
Every business has disagreements: an invoice that will not be paid, a delivery that arrived late, partners who no longer agree on direction. Most are settled informally. Some harden into disputes that distract management and put relationships at risk.
Common business disputes suited to ADR
- disagreements between partners or shareholders;
- disputes about whether goods or services met the contract;
- unpaid invoices and disputed accounts;
- disagreements between investors and business owners;
- supplier, distributor and customer disputes;
- winding up a joint venture or partnership.
Why businesses use ADR
Confidentiality. Commercial information, pricing and reputations can be discussed privately, within legal limits.
Commercial solutions. A mediated agreement can include terms a court could not order: revised payment plans, discounts on future orders, new delivery schedules or agreed ways of working together.
Relationships. Many businesses depend on lasting relationships with suppliers, customers or partners. A less adversarial process can help keep those relationships intact.
Choice of neutral. In arbitration, parties can agree on an arbitrator with relevant knowledge of the industry or subject.
Check your contract first
Many commercial contracts include a dispute resolution clause. It may require negotiation, mediation or arbitration before (or instead of) court proceedings, and may say where and how the process takes place. Read it carefully, and take legal advice on what it requires.
Getting ready
Before approaching an ADR centre, it helps to:
- gather the contract, correspondence, invoices and delivery records;
- prepare a short timeline;
- calculate what you believe is owed, and how;
- decide what outcome would genuinely work for the business;
- confirm who has authority to agree a settlement.
Limits to keep in mind
ADR is not suitable for every commercial problem. Urgent situations, for example where assets may be moved or confidential information misused, may require a court order. Suspected fraud or other criminal conduct may need to be reported. And mediation only works where both businesses are willing to take part.
A settlement agreement should be clear about what each party will do and by when. Independent legal advice before signing is sensible, especially where significant sums are involved.
This article is general information, not legal advice. For advice about your own situation, please consult a qualified lawyer.