The commercial world is more complex and intricate than ever before. As a result, it can be difficult for businesses to avoid commercial litigation. This can be difficult to recover from: there are the financial costs from the dispute, as well as reputational and morale hits too. As such, it’s vital to avoid being sued. Below, we explore how you can prevent and reduce commercial litigation.

Have up to date Contracts, HR Policies and a Company Handbook

Whether you have an HR team or are a lone HR Manager, if you are CIPD trained you will already know the necessity for getting these essential documents in place and keeping them up to date – however a big part of the HR role includes explaining the importance of these documents to team leaders and the board so that everyone is using them and following your recommendations!  Thankfully with HR increasingly having a seat on the board, this is becoming easier to implement in the real world.

Acknowledge and act

Hiding an issue rarely works. If you sense that a commercial dispute could be forming, it’s best to acknowledge the issue and act accordingly. Constructive engagement with the other party is the best place to start – ideally, you’ll be able to resolve any issues amicably. However, if talks aren’t progressing, then it’s advisable to seek help from commercial litigation lawyers to ensure that the damage to your business is limited.

Observe Health and Safety

It sounds obvious, but risk assessments, employee training, PPE and following HSE guidance are not rules to penalise a business, they are there to protect it – and having this in place will help an organisation prove due diligence.  Encourage other leaders to have a proactive attitude towards health and safety matters.

Create a contract

Contracts can make it easier to avoid commercial litigation in the first place. A contract will clearly set out everything that is expected and agreed upon between different parties whether that be employees or other businesses. Whenever you work with a client or with another business, your organisation should formalise a contract to ensure that there’s clarity and understanding. In the case of a dispute, a contract can help you avoid litigation and work towards a solution.

Communication

Communication is an essential tool for avoiding commercial litigation- and undertaking communications and management training for line managers can often prevent complications further down the line. Many disputes occur because leaders fail to communicate effectively, or they fail to keep each other updated on progress. However, it isn’t only staff issues that can cause litigation and the same principles apply in other areas too.  By maintaining a consistent dialogue, and effective communication most breakdowns in communication can be avoided. The key to this is honesty: encourage leaders, managers and employees to keep clients and partners informed on progress and changes, regardless of whether the news is good or bad. This can ensure that everyone has the correct information to adapt and make their own decisions on the fly.

Proof and documentation

Sometimes, disputes are inevitable even if you have the best intentions. As such, it’s important to collect proof and documentation that can help you during litigation. For a start, it’s important to collect emails, relevant files and contracts that can help the case move forward. Ideally, you’ll have an organised filing system that can help you access these documents without wasting too much time. On top of this, just remember to save anything that feels useful during this process. Any piece of evidence could come in handy during litigation, even if it feels worthless at the time.  Having an HR system in place will be invaluable here, but risk runs in other areas too.  However, if HR sets the standard, other departments can follow.

Avoiding commercial litigation is a sign of a healthy business – however, good communication will also lead to happier employees and better working relationships.

HR is in a unique position to lead by example and inspire change from the top down – and not only on HR matters.  As you continue to inspire change and growth across the business, your influence will not only reduce the risk of HR disputes, but will also reduce the business risk of finding itself in a commercial dispute.