January 2009 - Spotting a business dispute

It is not uncommon for business people to come to us for advice on a dispute once it has reached an advanced stage – usually once they receive a solicitor’s letter or court proceedings have already started. If you can nip a dispute in the bud, so to speak, it can often be resolved much more quickly and with far less cost.

So how can you tell there might be a dispute looming?

1. Payment delays. It is not unusual in the present economic climate for SMEs to experience delays with payment – usually this is a sign of your customers trying to manage their cashflow. However, it can often be a sign that someone is not happy with your goods or services. It is definitely true that we British do not like to complain and so, frequently, the first sign of a dispute brewing will be a lack of payment.

   If you are experiencing payment delays, ask why. If your customer has a complaint, it is better to know sooner rather than later, as problems can often be sorted out before firm positions are taken and lots of money spent on legal fees. If they don’t complain and just say it is down to cashflow problems, confirm this in writing – then you’ll have some evidence that they were happy with your goods or services should they later make a claim. If they still fail to pay up, take action to recover the debt, taking the Cousins Business Law zero tolerance approach to bad debt, and reduce the likelihood of this happening in the future.

2. Communication dries up. Another sign of a dispute brewing is when someone stops communicating with you. We live in an age of instant communication so, if someone has stopped returning your calls or emails, especially when they used to respond quickly, there is generally something wrong.

   If this does happen, take it as a signal to get your paperwork in order and seek advice. We recommend 5 steps to effective handling of business disputes. Often, a solicitor’s letter will restart communications. Even if their response is not what you would want to hear, it does open the way to resolving any dispute.

3. Guilt. Do you feel that something went wrong with a particular client or contract? It is natural not to want to admit fault but, if you do feel that you should have done better, then this again is a sign to get your paperwork in order and seek advice. That advice might well be that you are in a much stronger position than you thought but, if not, at least you can start marshalling your strengths and weaknesses in preparation in case a claim is eventually made.

Our prediction is, that as the economy continues to falter and businesses across the world start to suffer, there will be a continued increase in the number of business disputes which, if not carefully managed, could see small and medium sized businesses facing punitive legal bills or, worse, being driven to the brink of existence.

Take advice, take it as soon as you spot a dispute on the horizon, and you will have a much better chance of preventing a full blown dispute occurring, or at least minimise the time and cost involved in a case that’s unavoidable and maximise your chances of success.

Cousins Business Law offers a free half-hour telephone consultation for anyone with a business dispute. Call us on 0845 003 5639 or book online here.

In spite of the current global climate, cross border trade continues and, for any foreign owned company doing business in the UK, there are some basic aspects of the UK legal system which are essential to understand.

Cousins Business Law has published a useful Guide to doing business in the UK. Written for overseas business owners who are either currently doing business here or are considering trading in the UK. It’s also a useful ‘quick guide’ for British businesses too, as it records the basic aspects of the law which relate to all trading relationships here.

• The issue of jurisdiction and the laws of England and Wales
• Business structure
• Trading laws and regulations
• Employment and staff issues
• Property
• Handling business disputes

Download a PDF copy of the Guide to Doing Business in the UK from the Cousins Business Law website or view the Guide online here.

Disputes between neighbours over boundaries often arise through an (understandable) misconception about the importance of the Land Registry plan in your title deeds. So it’s essential when buying property, whether business premises or your next home, to ensure you understand where the boundaries are.

Many people wrongly believe that the red line on the Land Registry plan is conclusive evidence of the exact line of the boundary and frequently neighbours attempt to resolve disputes by scaling off boundaries from the Land Registry plan.

However, the ‘General Boundaries Rule’ (set out in s60 of the Land Registration Act 2002) explains that this isn’t so. In fact, it confirms that the lines on your title deeds are not conclusive evidence of the exact line of your boundaries.

If your deeds don’t tell you, then how do you establish the exact line of a boundary?

A solution is a Land Registry procedure known as ‘determining the boundary’. This procedure requires the production of a very precise plan showing the exact line of the boundary. The plan will need to be sent to the Land Registry with a completed application form (form DB) together with the Land Registry fee (currently £80).

To successfully determine the exact line of a boundary, you will need to make sure that the exact line of the boundary sought is consistent with the title deeds. You will also need to use a qualified surveyor to draw up a plan that meets the Land Registry’s requirements.

Unfortunately, the flaw in this procedure is that it requires the consent of your neighbour. If you apply to the Land Registry to have the exact line of your boundary determined without the written agreement of your neighbour, the Land Registry will write to your neighbour to give them notice of the application and give them an opportunity to object.

If your neighbour objects (and you cannot agree the boundary between yourselves), the dispute can be referred to the Adjudicator to Land Registry, although in our experience they tend to steer people to the Courts.

Possibly the only foolproof way to ensure you never have a boundary dispute would be to require the seller to follow the ‘determining the boundary’ procedure for all the boundaries before you purchase a property. This will almost never be possible in practice however so perhaps the best advice is to try to build a good relationship with your neighbours in the hope that any disputes can be resolved amicably.

If you have tried the amicable route and find yourself in dispute with your commercial neighbour you’ll need to take professional legal advice. Contact Cousins Business Law here.

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