How to handle business disputes effectively (and avoid them in the first place)

By Yulia Barnes, founder and managing partner, Barnes Law

In a perfect world, all professional relationships would work out exactly as planned but, sadly, in business, disputes are almost always unavoidable. From disagreements over contracts to conflicts between business partners, problems develop in many different forms.

How you deal with the issue can significantly impact the success and future of your business, not to mention your reputation, so it is vital to understand all the dispute resolution options available to you. However, first, you should ensure you understand the root causes of business disputes, so you can take proactive steps to prevent them occurring in the first place.

Why business disputes occur

In most cases, business disputes occur due to a breakdown in communication or misunderstandings between parties. These misunderstandings can relate to contract terms, project expectations, or personal conflicts. Additionally, disputes may arise when parties differ in opinions, values, or goals. Other causes of business disputes can include breach of contract, misrepresentation, or fraud.

By locating the root causes of business disputes, you can take proactive steps to prevent them from occurring in the future and work towards finding practical solutions.

Choosing the most suitable dispute resolution method

There are four main ways to solve business disputes: negotiation, mediation, arbitration and litigation. Each has advantages and disadvantages and which one is most suitable will depend on the individual issue at hand.

You should consider several key factors when deciding which dispute resolution is most appropriate. First and foremost, assess the nature of the dispute and the underlying issues that led to it. For example, traditional litigation or arbitration may be a better option if the dispute involves a breach of contract. On the other hand, mediation or negotiation may be more appropriate if the dispute is more subjective or involves ongoing business relationships.

The costs and time involved in each dispute resolution method should also be considered, as well as the potential impact on business relationships and reputation. Additionally, you should evaluate the ability to enforce any decision or agreement reached through your chosen dispute resolution method.

The importance of moving quickly

Time can be of the essence when it comes to business disputes, and the benefits of resolving them early cannot be underestimated. First and foremost, early resolution can save considerable time, money, and reserves that would otherwise be spent on lengthy legal battles.

Additionally, early solutions can help preserve business relationships, avoid reputational damage, and sustain goodwill between parties, as well as minimise any negative impact on employee confidence and productivity.

When to seek professional advice

At the first sign of a business relationship becoming acrimonious, it is always advisable to consult with a qualified dispute resolution lawyer, who can assess your unique position and recommend the approach most likely to achieve your desired outcome, while minimising stress and uncertainty.

Business disputes can be complex, and a lawyer can help you navigate the various options available and select the most appropriate dispute resolution method. They can also assist you in negotiating settlements, drafting legal documents, and can represent you in any arbitration or litigation proceedings.

Additionally, a lawyer can objectively assess the strengths and weaknesses of your case and advise you on the potential risks and benefits of pursuing a particular course of action.


Almost all businesses will encounter a dispute at some point, and each business dispute is unique and requires careful consideration when deciding how to resolve it. Successfully resolving a business dispute takes an open-minded approach, a carefully crafted plan, a willingness to compromise, and a commitment to finding a mutually agreeable solution.

By working closely with a lawyer, you can protect your needs and work towards a satisfactory resolution to the dispute.