How to Resolve Commercial Disputes Without Litigation in Australia?  

Australia’s business market is vast and, therefore, very competitive. It is nearly impossible to run a business without getting into a dispute. Although multiple laws are present to secure your business and protect your rights, the chance of always staying on the safe end is nearly zero. A considerable section of the Australian economy depends on the business market, but the citizens are not confident enough to start a business because of problems like business disputes.

“The Australian economy is resilient, but business and consumer confidence is fragile.”

– Julie Bishop –

The Australian government is rapidly making policies and laws to protect and encourage people to own businesses. There are multiple laws for commercial dispute resolution. In this blog, I’ll explain what commercial disputes are and how to resolve them without going to a courtroom. Because litigation is a costly process, it takes time and affects your business financially.

Let’s dig in to learn the ways that can save you time and money during a commercial dispute resolution.

What is a Commercial Dispute in Australia?

A commercial dispute is a business disagreement between two or more parties/stakeholders. These disputes typically occur when there is a breach of the agreement’s terms and conditions, intellectual property rights, and fiduciary duties. There are multiple ways to resolve a commercial dispute, but the preferred method is outside the courtroom.

In this way, you will not only avoid the courtroom drama but also save yourself some time and money. In situations where the opposing parties cannot agree to mutual terms, litigation is the only way to solve the dispute. Whether you are solving your dispute outside of a courtroom or in a courtroom, it is always recommended to hire professional business lawyers. They will help you resolve conflicts immediately, ensuring that your interests are protected.

How to Resolve Business Disputes Without Litigation?

Commercial dispute resolution is essential to protect your business interest. Delays in dispute resolution can damage your business and worsen your relationship with other parties. The way you opt for commercial dispute resolution entirely depends on the outcome you want to achieve.

There are two major ways to resolve business disputes without litigation, Alternative dispute resolution (ADR) and mediation.

Going to court is not a wise decision, and I don’t recommend this path for disputes that can be resolved in other ways. It would help if you focused on preserving your business relationship with the other party/stakeholder. Therefore, the best approach is to consider ADR or mediation.

Let me explain the process of Alternative dispute resolution (ADR) and mediation. It will help you understand why you should choose them over litigation.

1. Alternative dispute resolution (ADR)

Alternative dispute resolution (ADR) is a way of resolving commercial disputes without going to the courtroom. In ADR, an impartial person plays the role of a mediator to help both parties agree on mutual terms. The mediator proposes favorable conditions for both parties to resolve matters mutually.

ADR is an option that keeps the dispute under control and in conditions that can be solved without the court’s interference. You can use ADR before, during, or even after a litigation process. Courts and tribunals also conduct more formal ADR, which is typically a requirement of the parties before a matter moves to a hearing.

The advantages of the Alternative dispute resolution (ADR) are given below:

• Save time and money
• Flexible and informal
• More control for both parties
• Confidentiality 
• Provides time to deal with emotions
• Limit the scope of a conflict to the essential subjects of both parties.
• Creative and multiple solutions
• Help to preserve business relationships.

2. Mediation

Meditation is one of the most common forms of ADR. This process refers to commercial dispute resolution with the assistance of an independent mediator. The process of mediation is informal and confidential.

The advantages of an independent mediator are:

• Both parties listen to each other and get heard by each other
• It is easy to identify the root cause of the dispute.
• There are more possibilities for positive development in the dispute.
• Both parties are eager to consider alternatives
• It aims to reach an agreement if the terms and conditions are appropriate.

The mediation process begins with the mediator listening to each individual separately to decide whether mediation will be a suitable option for both parties. The purpose of mediation is to make a decision that suits both parties’ interests. Both parties can mutually decide and discuss what they want, but the mediator makes the final verdict.

Steps of Commercial Dispute Resolution

The commercial dispute resolution process generally involves five steps. The details of these steps are given below.

1. Understanding the Dispute

When you feel that something is going wrong with your business, knowing how it impacts your relationship with the other individual/stakeholder is essential. It will help you to sort things out quickly. You can understand the root cause of the dispute by:

• Checking your facts
• Setting your priorities right
• Identifying potential outcomes of the process

2. Negotiation

Once you understand the reason for your dispute, it’s time to negotiate with the other party. If the issue is minor, you can resolve it through telecommunication or a virtual meeting, but if the dispute is major and you have multiple points to discuss, it is important to have a face-to-face meeting to solve the matter through proper communication.

3. Letter of Concern

If negotiation doesn’t solve the problem, sending a formal letter might do the trick. It lets the other party know that mutual consent can make things right. Plus, this letter will be an essential proof if things get more serious. If the dispute is intricate or you’re not great with words, it’s okay to seek help. 

4. Seek Help from Third Party

Many businesses and litigation agencies have internal dispute-resolution processes. A business lawyer can come in handy to resolve the dispute without going to court. They know how to guide you through these tricky waters, ensuring everything goes smoothly. Aussie Legal Partners is best for you if you want someone to help. They are known for having some of the best business lawyers around.

5. Go to Court

When you fail to solve your dispute without litigation, going to court will be your only option. But it helps sort things out. Everyone has to make that decision when a judge decides on your case. The court process is also helpful because it is organized and has clear steps and deadlines. Going to court is also beneficial as it will wrap things up quickly with a fast decision.

Closing Insights

Timely commercial dispute resolution is crucial to protecting your business and reputation in the market. Therefore, the earlier you solve your dispute, the better for your business. Once your dispute enters the litigation process, it will take years to solve and a big chunk of your savings. Solving commercial disputes through alternative means is always better than going to a courtroom.

You must get a business lawyer to look over your matter even when you solve it out of the courtroom. Aussie Legal Partners has business lawyers who are expert, knowledgeable, competitive, and skillful. Our lawyers understand the importance of negotiation tactics and how to utilize them. Moreover, our business lawyers will make strategies for the courtroom if the dispute enters the litigation stage.

Book a free initial consultation today to discuss your case with our lawyers. You’ll gain valuable insight into your case and the expected outcomes.

FAQs

Why is arbitration preferable in a business dispute?

Arbitration is preferable in commercial dispute resolution as it gives certainty to the involved parties on how a case will be dealt with. Moreover, the people involved in the case can make decisions without relying on the courts.

How do we settle disputes between business partners?

Effective communication is one of the best ways to solve a dispute between business partners. Most disputes arise because of misunderstandings; therefore, the key to resolving a conflict is transparency in communication.

What are the causes of business disputes?

Some of the significant reasons for business disputes are:

• Fraud
• Negligence
• Miscommunication
• Lack of payment 
• Financial disagreements
• Employment dispute
• Confidentiality
• Discrimination
• Misappropriating funds
• Breach of duty
• Workplace harassment
• Breach of contract
• Lack of boundaries