“I’ll see you in Court!”…is a famous quote that you do not only hear in the movies, but in fact is a saying I hear clients throw around day-to-day when they are in a dispute.
However, before you (in Trump’s words) unleash “fire and fury”, you best be checking what the agreement between you and the other party says – as many will have a “Dispute Resolution” clause.
These clauses dictate the process for how the parties agree to engage with one another in the event of dispute – neither can just race off to Court! Usually, the procedure will involve staged forms of alternative dispute resolution.
For example, a standard type of dispute resolution process will look as follows:
- the aggrieved party must give the other party notice of the dispute, the concerns and outcome sought;
- the parties (or in the case of bigger companies, the CEOs or Managing Directors) must meet to try to negotiate a mutually acceptable outcome; and
- if negotiation fails, the parties must undertake mediation.
After mediation, it may be free for all to apply to Court, OR the dispute resolution process may provide for arbitration.
Obviously it would be great if the dispute could be resolved through the dispute resolution processes, however even if it cannot, the aim is to also narrow the number of issues in dispute. That is, you might start off with 10 and be able to narrow the issues down to 2 after the mediation.
The dispute resolution clause will often provide for certain timeframes for steps in the process to occur and dictate who pays for the costs of the mediation etc.
Despite this, there may still be an ability under the agreement to apply to the Court for an urgent injunction – to stop a party doing something they are not supposed to be doing under the Agreement or force them to do something. An injunction does not determine the outcome of the dispute – rather it just keeps the status quo or ensures things keep functioning as they should whilst the dispute is going through the processes.
Ultimately, the dispute resolution process is very helpful in nipping disputes early – without the expense, stress and time involved in litigation.
It is important to be aware of what is required under a dispute resolution clause and ensure you comply – otherwise you could find yourself in breach of the agreement!
Suzanne Brown is a Principal of McKays and Mackay’s only QLS Business Law Accredited Specialist. She can be contacted on (07) 4963 0820 or firstname.lastname@example.org.