As the COVID-19 pandemic continues to spread across the globe and cause unprecedented economic stress and challenges to business pipelines and workplace operations, it is inevitable that such instability will result in a spike in the number of commercial disputes. These disputes may stem from businesses becoming unable or unwilling to meet their contractual obligations or adjust to the disruption which may have come about though lockdown periods, business closures, reductions in staffing, cancellations of events and travel restrictions.
Already, we have witnessed the immediate impact of COVID-19 on our courts and tribunals with a number of fundamental procedural changes to the way in which disputes are being handled. The closure of open court hearings, the postponement of many cases listed for final hearing at the instigation of the courts, timetable delays and on-going operational limitations to civil litigation are all examples of the significant changes that have occurred to date. We are therefore seeing an increase in remote or virtual hearings being moved entirely to an online platform.
As a result, parties must attempt to find effective and innovative ways to negotiate commercial outcomes and explore the possibilities of a commercial settlement if:
- they wish to preserve existing business relationships,
- avoid further delays,
- avoid going to the Courts altogether, and/or
- they are prepared to compromise to some extent.
If parties wish to consider entering into settlement negotiations, it is important that all documents relating to the dispute are collated. This “information gathering” task includes collecting copies of the contract, invoices, financial statements and correspondence between the parties as well as third parties. Next, it is important to examine the clauses contained in the contract to determine if any unforeseen situations are contemplated. Importantly, a check of any relevant laws, regulations or codes of conduct with respect to the area of business is prudent to determine if any COVID-19 legal updates may impact the ability or entitlement to pursue the dispute.
Communication is key when attempting to resolve a commercial dispute efficiently. Often, a dispute may arise from a misunderstanding. If a business has been affected by COVID-19, it is helpful to relay this to other party, whether it be through an initial phone call or written correspondence. If the matter remains unresolved, documenting the dispute through written communication is important as the parties have it on record as to what position they take in relation to the dispute.
Mediation offers an informal means for parties to engage in negotiations with the assistance of an independent mediator. If settlement negotiations fall through and in light of the current COVID-19 climate, remote mediations through phone or video-conferencing are fast becoming the rule, rather than the exception, in providing parties a chance to settle their disputes online.
Despite the existence of COVID-19, parties should still consider the merits of attempting mediation and to be wary that going to court is expensive, time-consuming and stressful, all of which can have a significant impact on a business’ operations.
If you are looking to mediate a dispute, our mediation service DisputeOver offers in-person and online mediations Australia-wide. See here for more information.
How can Sharrock Pitman Legal help?
If you are involved in a commercial dispute that has arisen due to COVID-19 or if you are not clear on your legal position, we have an Accredited Specialist in Commercial Litigation and we are well equipped to assist in strategising and providing practical, cost-effective options to help resolve your matter. Please call us on 1300 205 506 or alternatively fill in the contact form below.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
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For further information contact
Lynda is a Senior Associate of Sharrock Pitman Legal. She is part of our Litgation team. For further information, contact Lynda Lim on her direct line (03) 8561 3330.