How to Manage Business Disputes Proactively

Litigation: 11 May 2025

Author: Aaron Stewart - Our People

Legal disputes can be a turning point for any business, potentially disrupting operations, draining resources, and placing reputations at risk.

At Aitken Partners, we help clients approach these challenges strategically, ensuring early intervention and well-informed decisions that protect business interests and preserve commercial relationships.

This guide outlines practical steps to help you manage disputes effectively from the outset, minimising risk and setting the course for a timely, commercially sound resolution.

Understanding Commercial Disputes and Their Impact

Disputes are, unfortunately, a common feature of doing business. Whether it’s a contract breach, shareholder disagreement, intellectual property conflict or consumer law issue, the way you respond can significantly influence outcomes.

Beyond legal costs, poorly managed disputes can impact business continuity, strain key relationships, and damage brand reputation. Early and decisive action rooted in sound advice can limit exposure and keep your business focused on growth.

The Value of Early Intervention

Addressing a dispute early provides the greatest opportunity to control the narrative, limit legal spend, and avoid escalation. Engaging with the other party, assessing your position, and understanding potential outcomes at the earliest stage helps prevent rigid positions and entrenched conflict.

In our experience, early resolution often leads to better commercial outcomes and avoids the distraction of prolonged litigation.

Critical Early-Stage Considerations

Insurance Notification

Many policies contain strict timeframes for notifying insurers of potential claims. Failing to notify in time may invalidate your coverage. When a dispute arises, your first step should be to contact your insurer or insurance manager to confirm your reporting obligations.

Contract Review

If the dispute stems from a contractual relationship, review the agreement carefully. Focus on:

• Dispute resolution clauses and pre-litigation requirements
• Termination rights and notice provisions
• Key deliverables and obligations
• Any limitations of liability or indemnities

Mandatory alternative dispute resolution (ADR) clauses such as negotiation or mediation requirements are common and may need to be followed before legal action can commence.

Preserving Evidence

Well-documented evidence is key to resolving disputes efficiently. Collect and retain:

• Executed agreements and amendments
• Email correspondence and internal communications
• Meeting records, notes, and work logs
• Financial records and receipts
• Any relevant texts or phone records

Contemporaneous records often carry the most weight and can shape the course of negotiations or litigation.

Regulatory and Legal Timeframes

Certain disputes trigger statutory or regulatory obligations. Consider:

• Industry-specific reporting or disclosure requirements
• Applicable limitation periods for bringing or defending claims
• Contractual time limits for notices or actions

Missing a deadline, legal or contractual, can significantly impact your rights.

The Dispute Resolution Process: What to Expect

The Litigation Lifecycle

Should litigation become necessary, the process typically includes:

• Investigation: Gathering facts and evidence
• Filing: Commencing proceedings
• Discovery: Exchanging relevant documents
• Hearing/Trial: Arguing the case before a judge
• Settlement: May occur at any point, including after proceedings begin

Each stage presents strategic decision points that should be managed with professional legal guidance.

Alternative Dispute Resolution (ADR)

Where appropriate, ADR methods can resolve matters faster and with less expense than litigation:

• Negotiation: Direct discussions between parties
• Mediation: A neutral mediator facilitates resolution
• Arbitration: A binding decision from an independent arbitrator

These processes can preserve relationships and maintain confidentiality.

Steps for Managing a Commercial Dispute Effectively

Step 1: Develop a Dispute Management Plan

Having a framework in place allows your team to respond with clarity. A good plan should include:

• Roles and responsibilities
• Escalation procedures
• Documentation protocols
• Communication guidelines

Step 2: Assess the Dispute Objectively

Before taking action, undertake a structured review:

• What are the key facts and events?
• Is there supporting documentation?
• What is the commercial impact of the issue?
• Could this stem from a misunderstanding?

Clear-headed analysis helps remove emotion and clarify your position.

Step 3: Perform a Strategic Reality Check

• How does the other party view the situation?
• Are there practical alternatives to legal action?
• Is this dispute worth pursuing in the context of your wider business goals?

Consulting a third party or legal adviser can offer valuable perspective.

Step 4: Select the Right Resolution Path

• For minor issues, a direct conversation may suffice.
• For complex or high-value disputes, formal legal advice is critical.
• Where contracts include ADR clauses, ensure compliance.

Choosing the right strategy upfront avoids wasted time and cost.

Working with Legal Counsel Effectively

When to Engage a Lawyer

Consider speaking with a lawyer early if:

• There is material financial or reputational risk
• The issues are complex or involve regulatory exposure
• The other party has legal representation
• Informal resolution efforts have stalled

Early legal insight can shape negotiations and reduce missteps.

Maximising Value from Legal Advice

To get the most out of your legal team:

• Provide organised and complete documentation
• Communicate your broader commercial objective
• Understand cost structures and likely timelines
• Stay involved and informed at key decision points

Best Practices During Disputes

Clear Communication Protocols

• Nominate a primary contact person for the dispute
• Keep communication factual, respectful and consistent
• Document all interactions and commitments

Business Continuity

• Continue meeting contractual obligations where appropriate
• Avoid retaliatory actions that may worsen the situation
• Implement contingency planning for disrupted operations

Post-Dispute Review

Once resolved:

• Debrief with your team and advisers
• Adjust contracts, processes or relationships as needed
• Document key learnings for future reference
• Consider restoring commercial relationships where appropriate

Proactive Dispute Management Starts with the Right Advice

Disputes are disruptive, but with the right advice, they don’t have to derail your business. At Aitken Partners, our commercial litigation team works closely with clients to manage disputes strategically and pragmatically, from early assessment through to resolution.

Whether you need clear advice at the first sign of conflict or strong representation in court, we’re here to help you move forward with confidence.

📞 Contact us on (03) 8600 6000 for tailored advice that protects your business and strengthens your position.