Budget means a rise in litigation, says Hammonds
Apr 28 2009 by Tom Scotney, Birmingham Post
The bleak picture of the financial year ahead painted by the Budget will lead to a dramatic increase in litigation, lawyers from Hammonds have claimed.
The chancellor has said that the next financial year will be the worst in terms of economic performance since the Second World War. And as the financial pressure increases, businesses will want to recoup and prevent losses as quickly as possible, which in turn will lead to an increase in disputes.
But the firm said taking a matter to court is not always the best option for trying to resolve the dispute and continue a business relationship. Not only can litigation damage business relationships, but the outcome is never certain and it detracts key employee time and some of the business’ financial resources away from the focus of the business.
Amanda Beaton, from the dispute resolution department at Hammonds in Birmingham, said: “A skilled lawyer can greatly assist in reducing litigation costs by effectively managing the dispute and in doing this alternative dispute procedures must be considered.”
One of the alternative dispute resolution procedures commonly used by litigators is mediation.
Erica Simpson, also from the firm’s dispute resolution team, said: “This is a highly effective method of resolving disputes. It is a structured negotiation which is assisted by an independent third party and normally takes place over the course of a day. Clients are more comfortable with it than with more formal dispute resolution procedures as they have control over the process and are familiar with negotiation.”
And mediation can help salvage business relationships which would flounder if the dispute proceeded to trial. Ms Beaton said: “As it is a relatively quick process and does not need as much preparation as would be needed if a more formal method of dispute resolution were undertaken, it is cost effective which is in the interests of every client.”
Mediation is also being encouraged by the courts who can penalize parties if they have not considered other alternative dispute resolution methods. Ms Simpson added: “When businesses consider the benefits of mediation, it is easy to see why it is becoming more popular than ever and most businesses want to consider meditation to resolve the dispute.”