Those who regularly read ASM PLUS blogs will often see references to the use of mediation and facilitated discussions resulting in business people having more time to devote to their work, generating income and being more productive.
Not so long ago I met with a client who had commissioned ASM PLUS to provide a three-day dispute resolution workshop in the Middle East. The client in question is an astute well-organised person with good business sense. He conducts his affairs appropriately and in commissioning us to do this work understands entirely that the best way to avoid costly and protracted disputes is either to forestall them or address them in the very early stages.
This client is quite a successful person and it became apparent that he maintains a reasonable standard of living for himself and his family. However, like so many people, in order to meet his financial obligations and provide for his young family he works long hours and also at weekends. Much of his income is derived from commissions or from fees paid for short-term project work. Accordingly, he is constantly having to strike a balance between completing his existing work to the high standards required by those paying him and finding new work.
Perhaps inevitably, some of these enquiries come to nothing and in planning his work my client has to allow for the fact that at least a proportion of his working week will not be economically productive. But because the client is an accomplished professional, he has managed to strike the right balance.
In the course of discussing the whole concept of dispute avoidance, we hypothesised as to what might happen if on top of having to undertake the demanding work schedule outlined above, my client suddenly found himself embroiled in court proceedings relating to a £100,000 contractual dispute.
The implications listed below represent a worst-case scenario. However, such a scenario is not a remote possibility and in the course of my legal and ADR careers I have both seen it play out in full and witnessed some quite significant consequences.
- Our client would have to budget for the very significant cost of the litigation which, unless he had legal insurance, would have to be funded on an ongoing basis with solicitors regularly requiring sums of money on account.
- The demands of the litigation and the attendant pressures driven by the lack of certainty that court proceedings often engender, would significantly increase his stress levels, possibly to a point that his ability to undertake his regular business-related tasks would be affected, which in turn could affect the likelihood of repeat commissions from existing clients.
- Even once an outcome was determined, whether he was to “win” or “lose”, the whole process of resolving costs issues might take many more months and yet more money would have to be spent on legal and court fees.
- The vagaries of litigation are such that because of financial all-time pressures he might be forced into some sort of unsatisfactory settlement.
- Given that in any given month it is likely that he would have to devote the equivalent of two or three days to the litigation, much more if a court hearing or trial date was looming, he would in all probability have to prioritise completing existing projects over looking for new work. In the short term this would probably ensure that his cash flow was maintained but a good proportion of the money he earned would fund litigation rather than ensuring the smooth running of his business.
- Following on from the last point, it is distinctly possible that somewhere down the line, our client might find that he had not been able to maintain some of his contacts or source sufficient work to maintain his cash flow. This could have repercussions both for his personal and business finances. Momentum may be lost and there could be an element of him having to start all over again.