Often the most costly part of resolving a dispute is the time spent dealing with it instead of running your business.
Your dispute may be with a customer, supplier, business partner or employee. In each case how you manage the dispute may vary, however there are some key steps you can follow to handle the issue and retain good business relationships.
Tips to help you manage a dispute
Compile your facts and evidence
Document the key details of the dispute. This could include dates, times, product or service details, warranties, photographs, leases, agreements or contracts and a summary of discussions or previous correspondence between the parties.
Put your documentation in date order and highlight the parts that are most relevant.
Keep calm and remain objective
Always remain calm, polite and professional in your spoken or written communications. Avoid abusive or emotional language, or laying blame.
Try to understand the situation from the other party’s perspective.
Think of creative solutions
Look for a ‘win-win’ solution that restores your business relationship. Make a list of possible solutions to discuss with the other party – be realistic and prepared to negotiate.
Consider how achieving a particular solution (or not achieving it) will impact on your business particularly in terms of time, money and future working relationships.
Talk to the other party
Contact the other party to negotiate a solution. Make sure the person you are talking to has the authority to settle the dispute. Sometimes minor issues can be handled with a phone call while other more complex matters are best dealt with face-to-face.
Listen carefully to what the other party has to say and take notes. Don’t interrupt them while they are speaking, and when they have finished you should respond in a calm and non-threatening manner.
If a solution is agreed to, make sure that you put it in writing and provide the other party with a copy.
Formally write to the other party
If talking doesn’t work, the next stage is to write to the other party outlining your position. This provides another opportunity for the other party to resolve the dispute. It can also be used as evidence of your attempt to resolve the dispute if you need to use another means of resolution.
Any letter should outline the matters in dispute, the steps that have been taking to resolve the matter, the required solution and a timeframe for this to occur. You may also want to include some of your documentary evidence. Email or post the letter and keep a copy for your records.
We have developed a sample letter of demand for recovering a debt and a letter of complaint for other matters. You can download the sample letters and tailor them in relation to your dispute.
If you are still unable to resolve the dispute after talking and writing to the other party you may need to seek assistance from a third party.
Be very cautious about resorting to litigation. Consider using an alternative method to resolve the dispute such as negotiation and mediation. These services are usually cheaper and less stressful than going to court.
Our free dispute resolution service can help you resolve a dispute with another business or a government department.
View our short video to learn more about our dispute resolution service.
Guide to managing business disputes
An essential part of being a small business owner is understanding how to best deal with problems. Many issues can be handled using common sense, however small problems can sometimes escalate into disputes.
Methods of dispute resolution
Our dispute resolution service offers ways of resolving disputes without going to court. These include negotiation or guided resolution and mediation.
Guided resolution or negotiation
Guided resolution is a process of negotiation that involves an independent third party who works with both parties to clarify the disputed issues, understand their rights and obligations, and identify possible options to resolve the matter.
A voluntary, structured settlement procedure. A mediator is appointed to assist both parties to reach an amicable solution to their dispute. The mediator is not the decision maker and assists the disputing parties to decide on the outcome.
As a first step, subcontractors in the construction industry are advised to check their contract for a dispute resolution clause. If there is one, the stated processes must be followed otherwise you could be technically breaching the contract.
Our dispute resolution service uses intensive case management (a form of guided resolution/negotiation) to help parties resolve their disputes. We can also provide parties with access to our subsidised mediation service. Find out more about the types of disputes we can assist with.
Go to court as a last resort
Taking a disputed matter to court can be an expensive and time-intensive process. You will need to consider the time, money and effort involved (as well as the indirect costs to your business) to make sure it is worth it. Before threatening legal action, get advice from a lawyer and consider all of your options.
Need help resolving a business dispute?
If you have any questions or would like to seek help to resolve a business dispute, our specialist business advisers can help.
Speak to a business adviser on 133 140