Saving dispute resolution costs: a collection of not-quite random pointers
Here is a selection of some matters (capped at 30) to be considered at various phases in the lifecycle of a contract and any consequent dispute.
They may not all be universally applicable but taking account of any relevant ones may have considerable financial benefit in the right circumstances.
They mostly remain in terse note format. Each one might merit extended discussion, and some might well be dropped. Follow-up comments welcome.
When preparing contracts: getting in at the start
Invest in thorough review and objective analysis.
Understand the financial status of any counterparty.
Address the details, tricky though they might be - such as defining functionality, preparing specifications and change-control procedures. Do this specifically and be upfront about it.
Don’t park difficult issues into schedules to be agreed later between possibly uninterested delegates.
Don’t cut and paste marketing material and in particular “marketing speak” into contracts
Make sure standard terms are incorporated and preferably acknowledged. Indeed, make sure everything really important is flagged, signed and acknowledged.
Plan for dispute resolution: escalation procedures; expert determination; mediation. Consider the merits of arbitration as an alternative to litigation in the civil courts.
When managing performance: planning for the unpredictable
8. Know the potential fault lines in the business or transaction that might generate disputes: get to grips with the history and the people.
9. Understand the reporting lines and concerns of your potential opponent. So far as possible try to “know the enemy”
10. Plan for deadlines.
11. Try to implement reviews and fend off problems before they become seriously contentious.
12. Put as much as possible into writing, however informal the context might appear. Cases are won by contemporaneous documents, not by what you tell the judge.
13. Be in a position to defend a claim if possible, rather than having to advance one. Keep retentions if contractually permitted: let them be sued for.
14. Shape the correspondence: take care with e-mail and social media messaging. Keeping track of, analysing and understanding the significance of extensive communications is one of the costliest exercises in dispute resolution. But, as flagged in 12 above, it is vital.
When making decisions
15. If possible, let someone who has had no emotional involvement deal with the matter. There will then be a more realistic prospect of cutting losses and stopping litigation in its tracks. There is no more dispensable luxury than a fight over a matter of principle.
16. One of the many benefits of hindsight is that it shows that, on many occasions, it has proved cheaper to compromise a legal battle than to achieve 100% success in court but not recover all your costs.
When implementing strategy
17. Keep a document storage and retrieval system in place. There is considerable advantage in using a records and document management system which enables relatively straightforward access to the evidence underlying any dispute and will assist in preparing the witness statements that are increasingly necessary at an early stage.
18. It is a common and understandable approach to delay or omit the search for certain documents and the preparation of detailed witness statements. This may be false economy. Early preparation may save costs by increasing awareness of what subsequent costs will be involved and thus guide a reasonable resolution.
When working with lawyers
19. Involve them early and tell your lawyers everything conceivably relevant: ask what you don’t understand to be explained and make your concerns known.
20. Ensure an effective, empowered decision maker with access to, and control of, people and documents. Preferably not someone who is personally exposed.
21. Understand that costs are incurred because time needs to be spent. Some lawyers’ time is irreducible and inevitable: some can be avoided by reduction of demands or increased allocation of resource to achieve co-operation and responsiveness. Accept advice on realistic deadlines and do not impose stupid ones.
22. Don’t treat your lawyers as the enemy: they are part of the team. Objective advice has a place. “Devil’s advocacy can be a good thing. Be prepared for your assumptions to be challenged.
23. Prepare for independent unbiased analysis. Any problems and the range of possible solutions to them must be analysed coldly, without emotion and in a wholly commercial way.
24. A particular course of action may be attractive as a matter of principle but not as a financial investment. Losing face or losing a case are not necessarily important. The prospect of losing more money than necessary is more important.
25. Plan and implement a communications structure: case information, reporting, budget control, billing and payment. This is all part of the teamwork required.
26. Avoid long, overpopulated meetings.
27. Deploy and require short reports.
28. Appreciate when a short-cut might be “good enough”
29. Accept the need for some front-loading of costs: investment now may save money in the future
30. Be prepared to drive the matter forward: in the right circumstances - take the battle to the opposition.
Summary
All the above matters are worth flagging but understand that several of the pointers may involve inconsistency. Their detailed implementation will depend on the specific circumstances of the particular transaction or case.
Nevertheless, aiming to give them active consideration will assist the process of effective dispute management and save substantial legal costs.
Feedback is always welcome, in all contexts.