In the light of recent market events, it is inevitable that the incidence of disputes will increase. Accordingly, it is important that your company is alive to the potential for claims and how to deal with them should they arise. There are several key considerations which should be addressed at the beginning of and throughout the life of a dispute and it is important for your company to have sufficient systems in place to adequately deal with these considerations.
In this newsletter we set out the practical considerations relevant to any dispute resolution.
The 10 commandments of dispute resolution
- Consider making a report to the police or other authorities - has there been a breach of law or regulation by your company or the opposing side which will require immediate notification to the relevant authority? It is important to note that your company may be held liable if a breach is not reported.
- Keep your regulators happy – is it necessary to inform the regulators of the claim or of any potential breach of regulation by your company or by the opposing side? Regulators may wish to carry out an investigation in relation to the dispute.
- Review the insurance position – does the company have insurance to cover the potential liability? If so, review the insurance policy-wording. The insurers may need to be informed of potential claims so that your company remains covered by the policy (see below).
- Make sure the public, your employees and your customers know your message –ensure that an internal team is instructed to deal with public relations. The team should ensure that the employees of the company are fully aware of the company's message. A consistent approach must be adopted in all communications both inside the company and with the outside world. Also consider whether it is appropriate to engage external advisors to assist with public relations issues.
- Determine whether this is an isolated dispute or part of a wider problem – identify the issues in the claim. Investigate the facts surrounding the issues, determine and isolate the source of the dispute and ensure that it will not give rise to further claims.
- Preserve documents – your company may be liable to a fine, and employees/directors may be liable to a fine and/or imprisonment, if relevant evidence is destroyed. Make sure document retention policies are in place and enforced.
- Maintain legal privilege over as many communications as possible – maintain a small team of key contacts in relation to the dispute and engage external counsel to advise you on maintaining privilege over documentation. Avoid the creation of unnecessary documents and ensure all communications are conducted on a strictly confidential basis.
- Deal properly with employees – ensure that company policy is followed and employees are dealt with in accordance with their employment contracts.
- Avoid data protection breaches – ensure that employees' personal information is preserved and kept confidential.
- Note the further considerations if your opponent is insolvent – this is an extremely important issue and will be the subject of our next newsletter.