I’d say 90% of the disputes I see start long before anyone calls it a dispute.
That’s probably the biggest lesson I’ve learned from doing dispute resolution work.
The problem usually doesn’t begin with the angry letter.
It doesn’t begin with the solicitor’s letter.
It doesn’t begin with the court proceedings.
It often begins months, sometimes years, earlier, when everyone was getting along perfectly well and nobody thought they needed legal advice.
And that’s where things get interesting.
Because when people are getting along, they tend to trust each other.
Which is lovely.
It’s also when they tend to make some remarkably expensive decisions.
Scenario 1: “It’s only a straightforward agreement.”
You sign an agreement.
You know the person’s name.
You’ve met them.
They seem genuine.
Everyone’s happy.
Except you’ve never checked who you’re actually contracting with.
No proper company details.
No company number.
No registered office.
No check as to whether the person signing actually has authority to bind the company.
Six months later, something goes wrong.
You instruct a solicitor.
The first question is:
“Who exactly is your contract with?”
Silence.
And suddenly something that looked like a straightforward commercial arrangement has become considerably less straightforward.
It’s amazing how much more interesting company details become when you’re trying to enforce an agreement against someone.
Scenario 2: “We signed it. I thought I had a copy.”
Another one I see far too often.
The parties sign an agreement.
Everyone shakes hands.
Keys are handed over.
Money changes hands.
The relationship starts.
And somewhere along the way, the final signed copy of the agreement disappears into the great administrative Bermuda Triangle.
Nobody has it.
One person has a draft.
The other has a slightly different version.
Someone remembers there was an appendix.
Nobody can find it.
And now everyone is trying to establish what they actually agreed to.
This becomes particularly painful when the agreement concerns property.
You hand over the keys to your property portfolio because you have an agreement with someone you trust.
Months later, the relationship breaks down. You want the properties back.
Then you discover that the document you thought governed the arrangement is either unsigned, incomplete, ambiguous or not quite the document you thought it was.
That’s not a good time to discover the importance of paperwork.
Scenario 3: “We’re going into business together.”
This one is probably my favourite. “I’m going into business with a friend.”
Fantastic.
“We trust each other.”
Even better.
“We don’t need a complicated agreement.” And there it is.
The sentence that may eventually become Exhibit A.
Because nobody goes into a partnership expecting it to fail.
But businesses change.
People change.
Money changes people.
Expectations change.
One partner thinks they’re putting in equal time.
The other thinks they’re putting in equal money.
One thinks profits are 50/50.
The other thinks their original investment entitles them to something different.
One wants to sell.
The other doesn’t.
And suddenly the two people who once finished each other’s sentences are communicating through solicitors.
The problem didn’t start when the relationship broke down.
It started when the relationship was good and nobody properly documented what would happen if it didn’t stay that way.
This is why I keep coming back to drafting.
People sometimes think legal drafting is about making documents longer.
It isn’t.
Good drafting is about making things clear.
- Who are the parties?
- What exactly are they agreeing to?
- What does each person have to do?
- When do they have to do it?
- Who owns what?
- What happens if someone doesn’t perform?
- What happens if the relationship breaks down?
- What happens if someone wants out?
- What happens if circumstances change?
And, perhaps most importantly:
What happens when everyone stops getting along?
You don’t write a good agreement because you expect the relationship to fail.
You write it because you understand that circumstances can change.
The slightly uncomfortable truth.
A lot of people are willing to spend thousands of pounds fixing a legal problem they could have prevented for a fraction of the cost.
They’ll spend £50,000 litigating over an agreement they didn’t spend £2,000 properly negotiating.
They’ll spend months trying to recover control of an asset without having properly documented who had what rights in the first place.
They’ll enter a business relationship based on trust and then discover, several years later, that trust isn’t actually a substitute for an agreement.
And then someone says:
“But we all understood what we meant.”
Yes.
Until you didn’t.
That’s the thing about human beings.
We’re remarkably good at assuming that everyone else has the same understanding of a situation that we do.
Right up until the money is on the table.
And this is where dispute resolution really begins.
When people hear “dispute resolution”, they often picture courtrooms, barristers, cross examination and dramatic legal arguments.
The reality is much less glamorous.
Sometimes dispute resolution is looking at a contract before it is signed and saying:
“Hang on. Who exactly is this agreement with?”
Sometimes it’s saying:
“Don’t hand over the keys until we’ve sorted this out.”
Sometimes it’s:
“Before you go into business with your friend, let’s discuss what happens if you stop being friends.”
And sometimes it’s simply:
“Please get a signed copy and keep it somewhere safe.”
Not exactly Hollywood.
But considerably cheaper.
Why early advice matters.
This is why I believe dispute resolution solicitors should not only be called when the dispute has already exploded.
The most valuable advice can come before there is a dispute at all.
It can be about:
- Checking the identity and status of the contracting parties.
- Making sure the right people are signing.
- Ensuring you receive and retain the final signed agreement.
- Properly documenting property and commercial arrangements.
- Advising on partnerships and shareholder relationships.
- Identifying what happens if the relationship breaks down.
- Spotting risks before money, assets or control are handed over.
- Making sure the agreement reflects what the parties actually intend.
Because once the relationship has broken down, everyone suddenly becomes extremely interested in the wording.
Unfortunately, by then, it’s usually too late to improve the contract.
My first piece of dispute resolution advice.
If I could give just one piece of advice in this series, it would be this:
- Get legal advice before making the big decision, not after.
- Before you sign the agreement.
- Before you hand over the keys.
- Before you transfer the money.
- Before you give someone control of an asset.
- Before you enter that partnership.
- Before you rely on a handshake and the words “we trust each other.”
You don’t need to wait until there is a dispute to speak to a dispute resolution solicitor.
In fact, the best time to get dispute resolution advice is when there isn’t a dispute.
Because by the time you’re sitting in a solicitor’s office saying “I wish I’d known this six months ago,” the advice is no longer preventative.
It’s remedial.
And remedial work is almost always significantly more expensive.
Think before the big decision. Get advice before the commitment.
That, in my view, is where good dispute resolution starts.
Part 1 of Nathanael Young’s 12 part Dispute Resolution Monthly Series.
Part 2: Can Your Claim Be Struck Out Before Trial?
Because sometimes the first time you discover there is a problem with your case is when the other side asks the court to get rid of it.
Disclaimer: The information on the TV Edwards website is for general information only and reflects the position at the date of publication.
