Created by: Esther Stirling and Gabriel Rodriguez-Cleary.

‘From our combined 25 years of resolving disputes across the commercial, rural and agricultural worlds, we’ve distilled the following ‘rules’.  We’re sharing them with you to as a call to action to help you and your clients to tackle some of the most important issues we see people overlook, to their long term cost.  Some are more obvious than others, but they are all there to help avoid complex and costly problems’.

1. The Pen is Mightier than the Sword

When we see a new client, our first question will be to ask to see the documents.  We almost never get to see them!  So often, clients can’t find anything in writing that governs a critical relationship, or records a really important event.  What there is, is often incomplete or open to a variety of interpretations.

We might be looking at a sales contract, terms and conditions, a  tenancy agreement, partnership agreement: these are really critical documents.  We might be able to piece together what was intended, as contracts can be unwritten as well as written, but this is never a perfect process and guess what: the other party will always claim the terms are more advantageous to them than to you!

With Wills, litigation as to the meaning and effect of a badly drafted will can run on for years and exhaust the value of the estate.  So putting things down in writing is absolutely key and it doesn’t have to be expensive, in fact compared to the cost of resolving an argument later, the costs are negligible.  Even the process of taking advice and the discussions that go into preparing the agreement is hugely valuable in focussing minds and recording what everyone intends – it’s incredible how when they start talking, people who thought they were on the same page turn out to have a lot of differences!

2. Reading as Important as Writing!

It’s not enough to write it down: everyone needs to understand what it means and to be clear that it delivers what they need, so make sure the document under discussion is really discussed, not just signed off.

As litigation lawyers, we usually get to mark and then unpick someone else’s homework, going through a contract to find the problems and to see whether we can get it to work for our client and not someone else.  Over time, we’ve developed skills in stress-testing agreements, because we’ve seen where the weak points often are.  So use us as an extra pair of eyes to make sure everything is as risk free as possible.

Consider:

• How long does the contract last? Can either party end it, or just some?  What notice has to be given?  Can you terminate for convenience or, once you’ve contracted, are your options for termination limited?  Where does all of this leave each party in terms of risk and reward?
• What happens if one party breaches the contract? Does the other party not only have an ability to terminate the contract, but to claim their legal and other professional fees?
• What happens if there is a sudden and serious event that means one party can’t meet its obligations?
• It sounds simple, but make sure the parties to any agreement are carefully thought through. There’s no point having Party A enter into an agreement to let Party B use land that Party A has no (or a limited) interest in!  In business agreements, consider what happens about voting rights and where the balance needs to be now and in future if, for example, a family is allowing the next generation to join.
• Consider what happens if a party is unable to fulfil their personal obligations due to a lack of capacity, or simply not being available to take necessary steps against deadlines. Is putting in place a Power of Attorney appropriate, to make sure nothing can be missed in future? 

3. Delaying the Difficult, Creates the Impossible

This is as true in business as it is in life generally!  Nobody ever looked back and said they were glad they didn’t grasp the nettle.  It never becomes easier to talk about the difficult stuff as time passes, in fact the opposite is usually true.

We see so many disputes that stem from people kicking the can down the road, or fudging conversations that needed to be crystal clear such that misunderstandings and false expectations arise, or where events simply overtake people and leave them at a serious disadvantage.

Whether it’s putting in place a sound succession plan for a business, reviewing and updating contracts or even the business structure itself, putting off the discussion simply increases risk.  Ask yourself: if you were doing business with another party, and you found out that they hadn’t taken advice about how they were running their business for years, though they knew there were issues they needed to address that put themselves at risk, would you want to carry on doing business with them?  We thought not.

Your legal team is there to help you with this.  We’re not just there to action the minutes of an essential meeting after it takes place, we can help you set up the conversations you need to have in the most effective way.  We can help you to identify the issues and set the right course to address them, so you can go into every conversation with focus and positivity.

4. There is No Such Thing as Future-Proof

It’s trite but true: the only certainty is change.  We all like to say that we can future-proof our clients’ businesses, but in reality there are events it can be difficult or even impossible to predict, so it’s essential to invest time not just reviewing where you are but identifying and assessing potential future risks and adjusting the plan as time goes on.

We pride ourselves on working with clients in a totally different way here.  We are available to sit down with our clients to conduct that regular, 360 degree review and risk assessment.  We will look at everything from the big picture business plan up: to review Wills, contracts, partnership agreements or company structures, recent or planned investments, plans for other generations, staffing, etc.  This is a part of the job we really enjoy.  We’ll involve the accountant, the land agent, the bank…whoever else needs to be part of that conversation to make sure the plan is right and we are all on the same page.  We bring to that review decades of experience in sorting out the problems that arise when those kinds of review just don’t happen.

Wherever possible, we do this face to face, so we can really get to know our clients and work as an effective team around the table and so that we can see – literally (we love a good walk around the farm or the shop floor!) – exactly what they need, who is who and what is important to our clients.  The knowledge we come away with from these meetings is invaluable and, in our experience, almost impossible to gather as effectively (or sometimes at all) without that kind of meeting.  The best bit?  We usually charge far less than our full rate for the exercise.  It involves a lot of listening and lays the foundation for a lot of valuable work.

5. The Worst Arguments Are Between Friends

Some of the most acrimonious and long-running disputes we’ve seen have been between family members or long-standing business partners.  They can make a bitter divorce look like a picnic in the sunshine!

The ingredients for a dispute are often there in abundance: a high degree of trust, what looks like regular and good communication, an expectation that we all know what we’re doing….The reality can often be really different, with little meaningful communication or clarity.  Plus, if things do wobble, emotions will run high.

These are the most common and worst kinds of dispute to resolve.  It’s harder to have an objective, brass-tacks conversation with a friend or family member about the legal side, but it’s actually the most important conversation you need to have.

6. Beware of Space Invaders

One of the big reasons we like to go out to see our clients is so we can check what really happens on the ground.  Sure, we’ll have done our research, but it’s amazing how many times we find unexpected faces or occupiers and hear: ‘Oh, that’s Susan, she does a bit of work for us now and again and uses one of the barns for her own business, but we don’t really employ her or lease the barn to her’, or ‘Those sheep? They’re Fred’s, he’s grazed them there for years’.

Informal arrangements can work well, but if you want to sell, refinance or generally change how things operate, they can cause real problems.  These arrangements can be inherited, develop over time or seem innocuous to agree to, but checking it out with us and getting something in writing where you need it can save a huge amount of trouble.

7. It’s good to talk, but write it down

So much business is done over the phone, often when people are on the move.  If a dispute arises based on what has been said on a phone call, the only evidence will be what you happen to remember later.  And guess what again, everyone’s recollection is likely to differ!

Always take the time to take notes from your phone calls or, better still, follow up with an email covering the salient points – that way, if there has been a misunderstanding, it can be corrected there and then and you have a sound record to refer back to.

8. Surround yourself with the very best people

Some people like to be the smartest person in the room and to have control.  Conversely, there are people who know they can’t do everything and pick a team of specialists and experts who all work together.  Provided they get the balance right, the latter group will avoid more disputes!

Be realistic about everyone’s strengths and weaknesses and be honest: you can either have time or control and as a business grows, there won’t be enough time to do everything; so do you want control even if it comes at the expense of growth?

It’s vital not just to create the team but to manage it and to consider who has control over what and why.  Voting rights, percentage shareholdings and control of assets are serious questions to address and we see them overlooked many times in the rush to get things done.

9. Take a step back and ask: Why?

There are so many calls to action here, but they all have to happen from a position of real clarity: what am I trying to achieve, but also why.  Is this business just about turning a profit and straight line growth, building a brand, filling a gap in the market?  What is the real purpose of it?  Bringing in the next generation? Selling it as a going concern? Leaving something of value for the next generation and, if so, how is that realised?

Running each decision through the acid test of ‘does this take me further towards the ultimate aim’ is critical and, surprisingly, seldom done.  The best person to have alongside you when you ask that question is often your lawyer.  We can help to answer that question by telling you where the hidden obstacles, the unintended consequences and the blind spots might be, from years of experience of dealing with people who didn’t take that all-important time at the start to work out not just the what, but the why. Most importantly, we can help you to tweak things where necessary without letting them drift and record exactly why things were done as they were – many disputes arise because at some later date, it’s said something different intended when a clear record kept at the time would have avoided the issue!

10. The Most Important Question – What is the Cost of Inaction?

So, you’ve stepped back, worked out what needs to happen, and … nothing happens at all.

We get it: we’re self employed consultants so we’re in business too and the exciting part is building the business and doing the work!

But every time an action is identified but not carried through, the risk of a problem grows as time goes on.  Be realistic, brutal even, about the risk that someone defaults on you tomorrow, and you have no proper terms and conditions in place…or someone suddenly leaves the business and tries to take clients.  Plus, we all know that life is short.

If we could take some of our clients back in time to a critical meeting and have them add that extra item on the agenda….or have them sign an agreement that got put into a drawer (or even read it properly!), we’d save them a huge amount of time, trouble and money.  If you knew you could save yourself years of litigation, by taking an hour out of your day to take action….of course you would.

For more information about dispute resolution, please contact Esther Stirling or Gabriel Rodriguez-Cleary.