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Optimal outcomes with responsible and fair contractual behaviour

The Government has said it will  “strongly encourage” parties to resolve emerging contractual issues through mediation and negotiation before they “escalate into formal intractable disputes”

As a member of the board of the newly formed London Chamber of Arbitration and Mediation ("LCAM"), I am proud that we have launched the chamber at a time when businesses and the courts can really benefit from it. LCAM will provide expedited arbitration and mediation services which can really help businesses to reduce the inevitable disruption as they try to resolve contractual disputes arising from Covid-19.

At AlixPartners we believe that almost every business will face such disputes - whether is it is due to cancelled orders, supply chain delays, early termination of contracts, stock becoming devalued or obsolete, or a whole range of other critical issues. In a time when so much focus will be on behaviour, it seems highly likely that the courts will expect to see businesses behaving in a fair and reasonable way in trying to resolve disputes before launching formal claims.

But staying away from the courts or third party adjudicators doesn't mean that there is no groundwork to be done, and behaving fairly and reasonably doesn't mean businesses can afford  simply to roll over.  To be able to negotiate or mediate outside the courts, management needs to be on top of the impact of Covid-19 and the cost to the business of any particular source of disruption. Now is the time to ensure that management has the critical information at its fingertips, whether that is the profit on lost sales due to delayed supplies or the long term effects of needing to replace lost customers or suppliers. Careful planning and data collection now will ensure that management can act in accordance with government guidance and protect the reputation of the business while achieving the best possible outcome.

A webinar entitled “Dispute resolution during Covid-19 and beyond”, to support the launch of the LCAM, will take place on Tue, Jun 2, 2020 12:45 PM - 1:30 PM BST.

AlixPartners has developed its own guide to rapid business recovery following the impact of Covid-19 'Disruption as usualand we will be running a webinar to help businesses to develop their disputes strategy on 9 June, 11:00 to 11:45 BST - please register if you would like to join us.

The UK government has urged companies to avoid damaging lawsuits and to resolve contractual disputes relating to Covid-19 through mediation before rushing to court. There have been concerns that the pandemic will trigger a flood of lawsuits against struggling businesses that will clog the civil courts as companies invoke contractual or penalty clauses.

Tags

covid-19, restart, arbitration, mediation, disputes, contractual disputes, responsible and fair, government guidance
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