Small Business Saturday Blog

A Guide to: Handling Small Business Disputes

Wednesday, September 14 at 16:08How To | Legal | Top Tips

Small businesses may face a variety of challenges over their lifetimes, but lengthy and increasingly expensive court cases do not need to be added to the list. The good news is that intellectual property and employment conflicts, or late payment issues can be managed without resorting to litigation.

Alternative Dispute Resolution (ADR) is the ideal solution to small business disputes.  An umbrella term for a whole range of processes and techniques that help parties resolve conflict without going to court, ADR usually involves the assistance of a neutral third party, and is often less formal, cheaper and quicker than litigation.

In addition to being highly time and cost efficient, ADR is also confidential and offers a discrete and neutral setting for businesses looking to protect their public image. Both arbitration and mediation are two examples of popular ADR processes.

With this in mind, the Chartered Institute of Arbitrators’ Business Arbitration Scheme (BAS) is highly recommended to small businesses, as it delivers five tangible benefits which are worth considering before making a decision as to whether or not it is in your businesses’ best interests to resort to litigation.

1. Fixed fee: BAS is a fixed fee scheme, providing certainty as to costs from the outset.

2. Speed: BAS offers the certainty of a final and legally binding decision in less than 90 days from the appointment of the arbitrator.

3. Simplicity: The BAS rules were created with simplicity in mind, allowing ease of use and flexibility.  The scheme is simple enough for businesses to present their own case without legal representation if they so wish.  Formal procedural steps have deliberately been kept to a minimum.

4. Limited Costs: The costs recoverable have been limited to protect parties against liability for their opponents’ high legal bills.

5. Specialist panel: CIArb provides a specialist panel of arbitrators.

In addition, a recent survey conducted by the Institute indicated that:

94% found the Scheme to be an attractive proposition for small businesses involved in low to medium value disputes;

93% found the cost of the Scheme appealing;

98% found the short timetable of benefit; and

96% found the Scheme easy to understand.

Aimed at being accessible and straightforward, BAS was launched following the increase in court fees last year, which in some cases, saw a hike of up to 600%. CIArb decided it was time to take action as it became apparent that small businesses in particular were disproportionately affected, and that many felt priced out of accessing justice through the court system.

As the majority of small businesses usually initiate court proceedings to recover unpaid monies, it was important to ensure that there was a scheme in place, tailored to the needs of businesses who had legitimate debt claims but felt that it wasn’t worth it to pursue them through the courts.

Ultimately, businesses that wish to use BAS, should consider drafting an appropriate dispute resolution clause into their commercial contracts or into terms and conditions, before any dispute arises.  A free dispute resolution clause for BAS can be found here.

For businesses looking to manage their dispute(s) and prepare for conflicts long term- the Chartered Institute of Arbitrators’ Business Arbitration Scheme is worth investigating.

Post by Olivia Staines, PR and Communications Manager, CIArb & Keisha Williams, Head of DAS, CIArb. The Chartered Institute of Arbitrators (CIArb) is a leading professional membership organisation representing the interests of alternative dispute resolution (ADR) practitioners worldwide. 

For more information on the Business Arbitration Scheme, please call +44 (0)20 7421 7444, email das@ciarb.org, or visit our website at www.ciarb.org/das. 


Categories:

Latest Posts: