Blog posts - disputes

For the past few years the Civil Justice Council ADR Working Group has been looking at the role of Alternative Dispute Resolution (ADR) and considering how it can and should be used in the future. The main question posed was whether it should be compulsory.They published their Final Report in Novemb...

Last August I blogged about the perils of trying to rely on a hotly disputed contract where the contract was based on an alleged conversation in a pub.The spat between Jeffrey Blue and Mike Ashley ended up in the High Court which found that no contract had been made.But this also applies to any any ...

You havegiven a Personal Guarantee to a creditor of a debt payable by another personcompany or organization, the creditor has made a formal demand and followed itup with service of a Statutory Demand. What should you do?First ofall you must act quickly. To avoid a bankruptcy petition you must make p...

The recent high profile case between Jeffrey Blue and Mike Ashley has brought a reminder from the High Court on how a contract is formed in English law and why it is so important to record any agreement in writing.On 26 July 2017 Mr Justice Leggatt gave his judgment in a claim brought by the investm...

Whom do you turn to when you’re in dispute with yourbusiness partner(s) and what should you ask them? How do you know whether your accountant or local solicitor isthe best person to advise you? For many business owners and directors, their first port ofcall is their accountant. After...

Flat management companies are companies that are set up tomanage blocks of flats. They mainly deal with issues such as repairs but alsomay have a role in ensuring that flat owners comply with the terms of theirleases.It is usual for the shareholders of these companies to bethe flat owners. They buy ...

On 21 March 2017 the Ministry of Justice published thenew and long anticipated Pre-Action Protocol (“PAP”) on debt recovery . It willcome into force on 1 October 2017.So what will this mean in practice? It has long beenthe requirement of the Civil Procedure Rules that parties should foll...

Sometimes you cannot help but think that the internet of things is moving so fast that it is difficult for old established laws and customs to adapt and keep up with innovations.The global explosion of short term lets via organisations such as Airbnb is a prime example. It is a huge challenge to the...

A recent High Court case has highlighted the extent to which commercial landlords need to take care when carrying out works to property which are likely to cause disturbance to tenants.Timothy Taylor Limited had a high class modern art gallery in Mayfair, for which it was paying a very substantial r...

Back in June 2015 I posted a blog on forfeiture of commercial leases, which is the term for when a landlord recovers possession due to a breach of the lease by the tenant. That blog looked in particular at forfeiture where the tenant was in arrears of rent.A recent case of Pineport Limited v Gr...

Many written contracts contain a clause stating that only the written terms will apply and that they can only be varied by agreement in writing.So what happens when the written terms do not reflect what has happened during the performance of the contract? Is it possible that terms could have been va...

Commercial landowners should always take care to avoid claims for noise nuisance where any activity on their premises is likely to cause nuisance to neighbours.A recent case has highlighted the issues. In 2006 Mr and Mrs Peires bought a 6 bedroom mansion in Denham, Buckinghamshire. The property bord...

Normally a director, or indeed a shareholder, will not have any personal liability for any debt of a limited company, but there are exceptions.One exception that I will cover in this blog is where an insolvent company is pursuing (or defending) litigation which is unsuccessful, and the company canno...

It is quite often the case that trade suppliers will require personal guarantees before they will open a credit account and trade with an organisation. An unsuspecting employee may sign off the contract without realising they have signed a personal guarantee with personal implications for them ...

It is quite common for pre-estimated compensation for specific breaches of contract to be provided for in the written contract at the outset, avoiding the difficult and costly process of calculation of loss when breach occurs. The other advantage is of course certainty, allowing each party to unders...

Step 1 - Identify your position • Prepare a chronological statement dealing with all the issues and identify all key documents such as any relevant contract, terms and conditions, correspondence and e-mails. • Identify your key personnel who would be called upon to give evidence. Get writt...

A director owes duties to the company which either arise as a result of the Companies Act, common law or contract. Duties under the Companies Act Under the Companies Act 2006, the duties are owed not just by directors who are registered as such but also by those who are held out as directors even th...

Back on 2 June I blogged on forfeiture, and said that "Note that if the Landlord forfeits the lease he no longer has the right to seize any goods or possessions of the Tenant remaining on the premises."But I must point out a very important distinction between "goods and possessions" and "tenants fix...

Reason 1 - Differences in contributions to the business After a while, it often happens that one director or group of directors ends up contributing more than the others. Often, one ends up bringing in more work, or provides more of the finance needed than others. This is perhaps the most common rea...

In this age the courts expect that parties will make every effort to resolve their dispute before any court action is taken. But there are risks if the parties enter mediation, a form of Alternative Dispute Resolution (ADR). Read on to find out more about ADR and mediation in general.There is a set ...

Forfeiture for non payment of rent (which may include service and other charges reserved in the Lease as rent).The ancient law of distraint, allowing the landlord to use bailiffs to arrive unannounced and seize goods without due notice, has now been consigned to the history books. See my blog&n...

What is a partnership?A legal Partnership comes into force when two or more people start a business that does not have any other legal form such as a limited company.Often there is a written Partnership Agreement which sets out how the business is to be run but, where there is not, it is governed by...

The staggering rise in court fees that came into force this week has sent shock waves throughout the SME sector. By way of summary: For a claim worth £25,000, the issue fee has increased from £610 to £1,250. For a claim worth £70,000, the issue fee has increased from £9...

A commercial lease often contains a covenant by the tenant to keep the premises in repair and deliver them up in repair at the end of the lease. In some cases the lease also requires the tenant to “put” them in repair, whatever their state at the commencement of the lease, which is a far...

As we start 2015, it does look as though the prospects for commercial landlords in opposing lease renewals under Part II of the Landlord and Tenant Act 1954  has become a lot easier as a result of the Court of Appeal decision in Youssefi v Musselwhite.To recap on the law, a landlord who do...

The problem with trees-a landowner’s liability Two recent cases have highlighted the extent of a landowner’s liability where trees growing on their land have damaged a neighbour’s property. In 2013 a court decided in favour of the landowner where Stagecoach South Western sued her f...

If you are a shareholding director and wish to leave your company, whether voluntarily or under pressure from your fellow shareholders, your main concern will be getting a fair price for your shares and other rights. This will usually be determined through negotiation and, before you embark on this,...

The new system of commercial rent arrears recovery (CRAR) comes into force on 6 April 2014.All the necessary regulations have now been published. So from 6 April landlords will not be able to send in the bailiffs without notice to recover arrears. A whole new system of rent enforcement comes into pl...

One question that I get asked a lot is: “When I’m dealing with a dispute by email, when should I use the phrase without prejudice? Many business people know they should use the term but are not sure when and what it means. Some write “without prejudice” on all correspondence ...

 The law of Defamation has finally in the 21st Century arrived in the on-line media and social networking age.The Defamation Act came into force in England and Wales on 1 January 2014. It is designed to modernise the law of defamation and strike a fair balance between competing interests w...

What authority does a director have? A company operates through its directors. The extent of powers that the directors have are set out in the company’s Articles, Memorandum of Association, shareholders’ or board resolutions, or other agreements. Unless authority has been delegated to in...

In the case of PGF II v OMFS Co and another, the Court of Appeal on 23 October has confirmed that refusal to mediate without giving good reason is itself unreasonable, and can deprive an otherwise successful party of their costs.In the circumstances of the case the defendants ignored the claimants' ...

A question I am often asked when advising a company about how to deal with a rogue director is what can the courts do to help.The first thing to appreciate is that directors owe duties to the company itself and it is usually only the company that can take court action rather than its shareholders or...

Step 1 – Know your strengths and your weaknesses The key to this is to take a step back and appraise your situation calmly and objectively. Look at the contract documents and, if you don’t have a formal contract, you will need to look at any correspondence and emails to show what you agr...

Back in June 2011 I posted a blog on copyright infringement by unauthorised use of photographs.The explosion in social media and prolific posting of photographs has made it incredibly easy for photos to be downloaded and used by others without consent of the photographer holding the copyright.A rece...

The recent changes in court cost rules mean that more and more business owners are likely to be forsaking solicitors and putting together their own cases and representing themselves in court. These Litigants in Person (LIPs) have a potential minefield of rules and regulations governing court proceed...

Since I last blogged on the subject in November 2012 (click here to see it), there have been some changes which came into effect on 16 March 2013. The Late Payment of Commercial Debts Regulations 2013 only apply to contracts entered into on or after 16 March. You may recall that if there is no contr...

The first question to ask yourself when you are thinking about making a claim is who you are going to claim against. And sometimes the answer might not be as straightforward as you think, and particularly when dealing with company groups.Imagine the following common scenario. You are approached by a...

Non lawyers are unlikely to have head of the so-called Jackson reforms which will come into force on 1 April, but they will certainly have an impact on you if you become involved in litigation in England and Wales after that date. So what is the fuss all about and how will it affect you? This is all...

Many businesses struggle to keep cash flowing in and delays by customers in paying their bills is often a major factor. There is a range of strategies that you can use to get in the money owing to your business - from credit checking before you close the deal, up front payments and deposits where ap...

Step 1 - Identify your position • look at exactly what has happened and gather together all key documents such as any relevant contract, terms and conditions, correspondence and e-mails. • identify your key personnel who would be called upon to give evidence. Get written statements from th...

I often advise companies who believe that a director can be removed from office simply by sending Form TM01 to Companies House. Unfortunately, this does not remove a director and is unlawful unless the correct steps have been taken beforehand. The following procedure should be followed: 1. Look at t...

With cash flow problems in a difficult economic landscape, do not forget the Late Payment of Commercial Debts (Interest) Act 1998 which could be a useful tool to persuade prompt payment. If the threat does not work the Act provides for the debtor to pay compensation, which can be substantial. The Ac...

It is often said that large businesses are at an advantage when it comes to litigation as they have bigger pockets. From my experience, that’s only part of the reason. They also have more experience of litigation and know how to work with their lawyers as a team in order to minimise their cost...

As a litigation lawyer dealing with disagreements between businesses, I frequently find I’m called upon to help business owners who have broken or ignored the terms of a legally binding contract. As with anything concerning the law, there’s a right way and a wrong way of going about this...

In hard economic times commercial landlords are often fighting a day to day battle to recover rent and enforce lease covenants. So here is a resume of the available options. Rent and Service Charges 1. Distraint: the first and most used remedy is to distrain for rent. This can also apply to service ...

Is there increasing friction between you and your fellow shareholders and/or directors? Are your board meetings starting to bear a striking resemblance to Alan Sugar’s ‘Apprentice’ ones? If so, then you need to take action and start to think tactically. The first points to consider...

I’m often asked by business owners for my advice when they are in dispute with a customer or supplier. Unlike the current message we get on everything from t-shirts to mugs to Keep Calm and Carry on! my advice is invariably Keep Calm, but don’t Carry On. If you’re in dispute with a...

Be pro-active. Get yourself on the front foot and ready to deal with any issues. This means understanding the terms of your lease and the type of disputes that can crop up and when they are most likely. A good start would be to sign up to our Commercial Lease Renewal service. We will highlight the i...

The iconic red London bus has found itself at the centre of a dispute over copyright.Earlier this month Judge Birss QC handed down his judgement in the Patents County Court case of Temple Island Collections Limited v New English Teas Limited and Nicholas Houghton.It is an interesting case because it...

With all the criticism and praise of David Cameron using his veto at the EU last week, as an expert in resolving commercial disputes, I know that sometimes walking away is the right thing to do. In negotiations and mediations, one of the ‘killer’ tactics available is the threat of walkin...

If you’re considering removing a director, or if you are a director facing the prospect of being removed by your company, there are many tactics to consider to obtain the most favourable result. Taking early legal advice from a solicitor who specialises in directors’ duties is essential,...

Getting your bills paid on time is vital to the financial health of your business. It’s often quoted that at least 10% of business failures in the UK are due to non-payment or late payment by customers. Managing your cash flow efficiently could be the key to your business survival.Not only doe...

There are certain things all businesses can do to right now to reduce the possibility of litigation arising (even years before you have a dispute). And they just happen to be the same things that will reduce your legal costs if litigation does occur, and also make it more likely that you will win. G...

A ‘pre-pack’ is a legal process where the business and assets of a struggling company are sold immediately after it is placed into administration. As the name suggests the deal is agreed beforehand meaning that unsecured creditors (including landlords) are not given the opportunity to ob...

This is always a difficult one to call, because the circumstances can vary so much. But there is one rule of thumb. Can you afford to lose it? If you can’t, don’t do it. There must always be a significant risk in these cases that you will not be repaid. The emotional pressure is always v...

If a director who has loaned money to their company resigns, or is dismissed, can they get their loan back? Many companies, especially in the current economic climate, seem reluctant to repay a director’s loan in this situation. The first thing to look at is the loan agreement itself, if there...

In my blog of 15th September 2010, I pointed out that breaches of directors’ duties can have serious consequences for a director, particularly if a company becomes insolvent or after it is sold. It is in these situations that directors frequently find themselves facing claims to pay often-huge...

It is clear that it is SME's who are bearing the brunt of the cash flow crisis caused by late payment or extended payment terms imposed by their biggest customers. A recent report by Touch Financial, an invoice financial broker, suggested that of 200 businesses questioned over half had changed ...

Company directors are subject to so many duties that, if they are not careful and don’t take proper advice, they can easily find themselves in breach of one or more of their duties. But, in SMEs and family-owned companies, the directors and shareholders are usually the same people; so who care...

Our senior partner and litigation specialist, Gary Cousins, spends much of his time pursuing financial claims against directors on behalf of insolvency practitioners and in defending those claims. All too often company directors are financially ruined after the demise of their company and some of th...

I was fascinated to read Emma Wimhurst’s article in the Independent small business section. Her views are, to say the least, controversial:"We’re all fed up with the R-word, but I believe the economic downturn has done many business owners a favour. It’s grabbed us by the prof...

Starting a business is not easy and running it on a day-to-day basis is equally trying in today’s ultra competitive climate. It is to be expected in such a scenario for the everyday gripes and grudges of staff, customers, and management to boil over and for such issues to escalate rapidly into...

It’s a sad fact of modern business life that we often find ourselves in dispute with a customer, a supplier, a competitor or some form of regulatory body. In all cases, it is important to face the dispute head on as soon as possible and to decide on goals and strategy. This involves taking an ...

Disputes over contracts can happen for many reasons, but so often they blow up because those involved have a different opinion on what they had agreed. You know the situation – you’ve had some work done or purchased a piece of equipment and you’re not happy with what you’ve r...

Arbitration is the oldest form of procedure for dispute resolution out of the courts. It grew up due to the need to have a forum for resolving international trade disputes, for example shipping and carriage of goods. It is only usually relevant in high value cases, as it can be just as expensive as ...

Understanding all the optionsPrior to 1999 the first choice for resolving disputes was always the court process. There was an aggressive culture of litigation, a first strike attitude, or as some would say of getting your retaliation in first. Many a litigation lawyer had a paperweight proclaiming &...

It is a sad reality of commercial life that there are now many businesses being conducted at the margins of commonly accepted business practice. By keeping ‘on the move’, they avoid debts and other liabilities and reduce their overheads putting their properly run competitors at a commerc...

(article first appeared in Cousins Business Law ezine September 2008)As the economy slows down, we can expect more business disputes than ever. Business disputes are bad for business due to the costs involved and the time that management must take in dealing with them. So what can you do t...

In business and indeed in our personal lives too, we often have to instruct a professional to advise and assist us. A professional can be anyone who holds themselves out as having specialist knowledge that we don’t possess. They might be accountants, auditors, solicitors, surveyors, engineers,...

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 m...

It is a fact about modern business life that we all need to instruct independent professionals to advise us in our business. These professional may advise us on financial matters (accountants, financial advisors, etc.), the law (solicitors, barristers, other lawyers, etc), information technology (IT...

There are a variety of alternative dispute resolution (ADR) methods available, adjudication is one only used in the construction industry. It was born in 1996 and came into play for written construction contracts entered into on or after 1 May 1998. It was a statutory cure for long running disp...

Having a business dispute go to court, whether it’s with a member of staff, a supplier or customer, must be every business owners dread. In a tough economic climate there tends to be less tolerance of mistakes and increased stress created by financial pressures. Some would say money worries ev...

The cost of litigation is always a concern for clients.  As lawyers Cousins Business Law are often asked, “If I win my case, will I be able to recover the amount I have spent on legal fees?” The simple answer is, “You can usually expect the court to order your opponent to refu...

Expert Determination is a confidential and binding process which is agreed by the parties to the dispute, either in the original contract documentation, or in a subsequent agreement. An expert appointed will reach a decision which will be binding on the parties. The advantages of expert determi...

Also known as Early Neutral Evaluation (ENE), this alternative dispute resolution (ADR) process emerged in the late 1990’s. The main difference to the other forms of dispute resolution is that any evaluation is non-binding. So why would a non-binding evaluation be of any help? The key is that ...

Fraud costs the UK economy many times more than all other types of crime taken together. The incidence of fraud is hugely under-reported, as the police have no interest in recording fraud as a crime unless they are also making an arrest. The fact is that there has been (and continues to be) exponent...

There’s a lot of fear, cynicism and mistrust in business circles about lawyers, litigation and how to achieve effective resolution of business disputes. Getting to know facts from the myths is a good way of giving yourself some confidence in what can be a very unsettling set of circumstances. ...

Unfortunately business owners are often so keen to secure a sale or start working on a big project that they fail to get all the paperwork in place.Disputes in business can happen for many reasons, but so often they blow up because those involved have a different opinion on what was agreed. You know...

The Credit Crunch is inevitably contributing to a delay in payment to businesses, particularly vulnerable SMEs. Money owed to small businesses shot up by 40% from £18.6 billion in 2007, to £25.9 billion in 2008, according to Bacs. And who knows where the figure is at this time, no doubt ...

The Insolvency Service today published their statistics for the number of company insolvencies for the 1st quarter of 2009. These show that there were a total of 4,941 liquidations in England and Wales (an increase of 56% compared to a year ago). Of these, 1,579 companies were wound up by a court (a...

As cash flow is becoming an increasing issue for SMEs, we are finding that more and more creditors are issuing Winding-Up Petitions. These can be a very effective way of getting a company to pay its debts. A Winding-Up Petition will be delivered personally to the company’s office but, unlike m...

This blog is a plea to all business owners.  Please, please, please - if you see a business dispute on the horizon, NEVER ignore it and leave it to fester.  I can tell you from nearly 20 years of dealing with business disputes that the sooner you tackle problems the better.We covered the t...

Mr Justice Arnold has called for the courts to take a more pro-active approach in curbing the fees that large commercial law firms charge for litigation. Allen & Overy represented Research in Motion, the makers of the popular BlackBerry mobile device, in intellectual property litigation against ...

SMEs are turning to litigation in ever increasing numbers to collect in debts. According to research undertaken by the Credit Management Research Centre, 2,000 such cases were brought in September 2008, compared with just 1,500 in January 2008. This is a clear indicator of generalised cash-flow issu...

The Government is considering reducing the time limit for debt collection from 6 years to 3 years.At the moment, firms have 6 years in which to issue court proceedings to collect debts. This is set to change and an announcement is expected to be made in the Queen's speech to Parliament in December.W...