Disputes are an inevitable part of commercial trading and risk management. For some businesses, the potential for disputes forms an integral part of their business model, accepting them as unavoidable occurrences in the fast-paced marketplace. However, the majority would obviously prefer to avoid disputes where possible. Despite attitudes towards these risks, careful planning can considerably help in controlling and potentially reducing their impact.
According to a recent article from Allen & Overy LLP, one approach to managing future disputes is to consider them at the early stages of any project or initiative. This implies articulating prospective risks, drawbacks, and contentious issues before they result in expensive proceedings. This could also include cross-consultation with different departments and employees to anticipate potential points of contention and designing mitigating measures accordingly.
The ultimate goal is to put a system in place that allows for meaningful dialogue and resolution before escalation to a formal dispute. This pro-active risk management can also serve to foster a culture of negotiation and compromise within an organization, reducing the reliance on, and cost of, external legal advice. Moreover, this philosophy extends to dispute resolution strategies too. With the advent of alternate dispute resolution mediums such as arbitration and mediation, the scope for a less formal, more control-oriented dispute management is broader than ever.
Thus, the key takeaway for legal professionals is this: although disputes are sometimes unavoidable, risk management is integral to their navigation. Invest time in dispute prevention and management during the early stages of a project. Facilitate a culture of dialogue and compromise within the organization to reduce the likelihood and severity of disputes. Finally, consider alternate resolution mediums to not only save on cost but also preserve commercial relationships.