How to Expeditiously Resolve Disputes in the Aftermath of COVID-19 and Why You Need to
By A. Ross Taylor, Wright, Johnston & Mackenzie LLP
COVID-19 has hit the global economy hard. Around the world, unemployment was up in 2020 compared to 2019. New job vacancies have shrunk, and many countries are in recession. Interest rates have been cut to help borrowing. Cashflow is tight and capital reserves are reducing. Inevitably, businesses will have less resources from which to fund costly litigation. They will have less appetite to do so too, because management time is consumed by effecting change to accommodate the new normal.
But in an environment where cash is king, walking away from disputes may only worsen the economic impact and could contribute to the downfall of your business. Achieving solutions which return funds, or limit the damage of failures incurred, may aid survival.
The key is to utilise effective mechanisms to resolve disputes quickly and cheaply. Litigation is fundamental to dispute resolution because its conclusions set the state’s expectations of societal behaviours. Bearing that in mind, there may be other forums which may be more effective, particularly in a time of crisis.
Mediation may best produce innovative solutions to diverse and evolving circumstances, such as COVID-19. Arbitration and Expert Determination are alternatives. In Construction, Adjudication is often the preferred route. It may be applied in other industries.
The first step is to identify what is really in dispute. If there are several issues, perhaps tackling the biggest one will unlock resolution, without the necessity of exploring the others. Then the best forum in which to ventilate parties’ positions should be carefully selected.
The contract may detail how disputes should be resolved. Ultimately, agreement will be needed. It is in the interests of your business that you achieve this in good faith. Now is not the time to take advantage of your counterpart, but to take advantage of effective dispute resolution.
A. Ross TaylorGGI member firm
Wright, Johnston & Mackenzie LLP
Law Firm Services
Glasgow, Scotland, UK
T: +44 141 248 3434
Wright, Johnston & Mackenzie LLP is an independent Scottish law firm offering the full range of corporate, dispute resolution, and private client services. They are GGI’s sole Scottish member.
A. Ross Taylor is an accredited mediator and a Fellow of the Chartered Institute of Arbitrators. He specialises in Construction Dispute Resolution and Avoidance. His UK-wide practice focuses on SME’s, professional advisors, and self-builders.
Published: Litigation & Dispute Resolution Newsletter, No. 14, Spring 2021 l Photo: Joan Vadell - stock.adobe.com