What Is Involved in Business Dispute Resolution?

Disputes in business are inevitable. Whether it’s a shareholder disagreement, a breach of contract, a supplier default, or a conflict between directors, how these disputes are handled can have a lasting impact on your business's reputation, cash flow, and operational continuity.

At Hegarty, we help business owners, directors, and shareholders navigate disputes with strategic clarity and legal precision.

What Is Dispute Resolution?

Dispute resolution refers to the legal and strategic processes used to resolve conflicts between parties without necessarily resorting to a full court trial. It includes negotiation, mediation, arbitration, adjudication, and litigation.

Dispute resolution is not one-size-fits-all, the right approach depends on the nature of the issue, the commercial relationship between the parties, and how urgently the matter needs resolving.

Common Types of Corporate Disputes

Disputes can arise from almost any area of business law. Some of the most common corporate disputes include:

• Shareholder disputes (e.g. dividend disagreements, exclusion from decision-making)
• Director disputes and fiduciary breach claims
• Contract disputes with suppliers, clients, or service providers
• Partnership breakdowns
• Debt recovery or non-payment issues
• Intellectual property or brand misuse
• Warranty claims post–business sale or acquisition

Understanding the root cause of the dispute is critical because, often, early conflict stems from unclear contracts or misaligned expectations.

Key Methods of Dispute Resolution

Below are the most common methods used to resolve corporate disputes in the UK:

1. Negotiation

Often the first port of call, negotiation involves both parties seeking a mutually acceptable solution, usually through their legal representatives.

Advantages:

• Confidential and informal
• Quick and cost-effective
• Preserves commercial relationships

Tip: It’s best to enter negotiations with a clear legal position, especially around contractual rights, and liabilities.

2. Mediation

Mediation is a structured but non-binding process where a neutral third party (mediator) helps the parties explore resolution.

Used frequently in shareholder disputes, contract breaches, and partnership disagreements.

Pros:

• Confidential and voluntary
• Faster than court
• Can maintain working relationships
• Parties retain control of the outcome

Cons:

• No guaranteed resolution
• Relies on willingness to compromise

3. Arbitration

Arbitration is a private and legally binding dispute process governed by the Arbitration Act 1996. Parties agree to submit their dispute to one or more arbitrators, whose decision is enforceable in court.

Typical in cross-border contracts, franchise agreements, commercial leases.

Pros:

• Legally binding
• Confidential and specialised
• Faster than court in complex cases

Cons:

• Costly if multiple arbitrators involved
• Limited right to appeal

4. Adjudication

This is a common process in construction and infrastructure disputes. An adjudicator is appointed to give a quick decision, which is binding unless challenged later in arbitration or court.

5. Litigation (Court Proceedings)

Sometimes, a formal court claim is unavoidable. Particularly where urgent relief is needed (e.g. freezing orders, injunctions) or the other side is uncooperative.

Commercial litigation can be time-consuming and expensive, but may be necessary to:

• Enforce breach of contract claims
• Recover substantial debts
• Protect your business interests (e.g. IP, confidential data)
• Seek damages or equitable remedies

Confidentiality in Dispute Resolution

A major benefit of alternatives like mediation and arbitration is that they are confidential, unlike court proceedings, which are often public. This can protect your brand reputation and limit reputational damage during sensitive commercial disputes.

Contract Clauses That Influence Dispute Resolution

Most business contracts include dispute resolution clauses that outline what steps must be followed in the event of a disagreement. These may include:

• Notice periods for claims
• Escalation procedures (e.g. negotiation → mediation → litigation)
• Jurisdiction and governing law
• Arbitration clauses

We recommend reviewing these clauses regularly to ensure they reflect your commercial needs, especially for key suppliers or strategic partnerships.

Early Legal Advice: Why It Matters

Engaging a solicitor early doesn’t mean you're heading to court, it means you're protecting your interests. Early legal guidance allows you to:

• Understand your legal position and exposure
• Identify potential breach or liability
• Strategically plan how and when to engage the other party
• Preserve crucial evidence (emails, contracts, financials)

Often, disputes can be resolved before they escalate if the right legal tone and tactical advice are applied early.

Approach Disputes with Strategy, Not Emotion

Disputes are part of business life, but how you manage them defines your leadership. Whether it’s a director disagreement, a breached contract, or a broken partnership, resolution requires strategic thinking, legal clarity, and composure.

At Hegarty, our dispute resolution team works closely with corporate clients to balance legal protection with commercial objectives. Whether you're looking to negotiate a settlement, mediate a dispute, or prepare for litigation, we offer tailored, results-driven advice at every step.

Speak to Our Dispute Resolution Team

If you’re facing a business dispute or want to strengthen your contracts and risk processes, our team can help.