Commercial disputes arise when two or more parties in a business relationship disagree. These disputes often stem from a party failing to meet the terms outlined in a business contract. To reduce the risk of such disputes, it is wise to seek legal advice before signing any contract.
Below are essential steps and processes to help you navigate and resolve commercial disputes efficiently and effectively.
Commercial dispute resolution
Dispute resolution includes various methods to settle disagreements, from formal court proceedings (litigation) to less adversarial approaches. While some may think litigation is the only solution, faster and more cost-effective alternatives exist. These are collectively called ‘Alternative Dispute Resolution’ or ‘ADR’. You should consider court proceedings only after exploring other reasonable options.
Alternative Dispute Resolution (ADR)
ADR describes processes where an impartial person (an ADR practitioner) assists parties in resolving their disputes. The four main types are negotiation, mediation, facilitation, and conciliation.
Arbitration and expert determination also help resolve disputes. They can replace court proceedings or follow unsuccessful ADR attempts.
Negotiation
Negotiation usually serves as the first step in addressing disputes. The parties communicate directly, verbally or in writing, to reach a mutually acceptable agreement. They may negotiate themselves or through legal or other representatives.
Mediation
Mediation involves an impartial mediator who helps the disputing parties negotiate a settlement. The mediator does not decide the outcome but encourages an amicable resolution. Parties can formally document and legally bind any agreement reached during mediation.
Facilitation
Facilitation resembles mediation but usually involves groups in conflict, such as local planning matters or body corporate disputes. The facilitator allows different points of view to be discussed and considered while guiding the group toward an agreement.
Conciliation
Conciliation involves an impartial third party, the conciliator, who assists the parties in reaching an agreement by offering advice and guidance. The conciliator often has expertise in the dispute’s subject matter and informs the parties about their rights and obligations.
Arbitration
In arbitration, parties present their case to an independent arbitrator who makes a binding decision. Parties must follow the arbitrator’s ruling. Arbitration commonly applies to industrial relations or contractual disputes.
Expert Determination
For disputes involving technical issues, parties may refer the matter to an expert. The expert uses both evidence and personal experience to help the parties reach a decision. Examples include valuing intellectual property or gaming machine entitlements.
Civil and Administrative Tribunal proceedings
The Civil and Administrative Tribunal (CAT) resolves legal disputes in all states and territories. NCAT serves NSW. NCAT offers a less formal process than courts. It provides an accessible, efficient, and low-cost forum for handling and mediating disputes.
NCAT hears cases including disputes over goods and services, residential tenancies, building and construction, equal opportunity, owners’ corporations, and planning.
To start NCAT proceedings, complete an online application on NCAT’s website. After submitting, the tribunal schedules a conciliation or hearing date. For some disputes, such as building matters, parties must attempt conciliation before a hearing. If they cannot reach an agreement, the matter proceeds to a hearing. Legal representation is optional but common.
The law treats NCAT orders the same as court orders.
Commercial litigation
Litigation starts formal court proceedings to resolve disputes. Parties may file a claim when other resolution methods fail.
Court cases often involve complex commercial disputes from transactions, contract law, and misleading or deceptive conduct under the Australian Consumer Law. Courts and tribunals vary based on dispute type and claim value.
A cause of action must cite a breach of legislation or common law. Parties present evidence, including documents, statements, or videos. Witnesses may testify to support each side. The court evaluates the strength of the evidence carefully.
Court proceedings follow strict timetables and require thorough preparation.
Conclusion
Commercial disputes can be stressful, expensive, and time-consuming. However, disputes do not always lead to court proceedings. Exploring all resolution options is generally recommended before starting formal action.
This information is general and not a substitute for professional advice. Our expert lawyers can provide guidance to protect your rights and resolve disputes.
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