My NZ Business is in a Dispute. What Can I Do?

In commercial dealings with other businesses, conflict and disputes are inevitable. However, there is a wide range of methods through which you can resolve a business dispute. This article will outline the:

• criteria your business should consider when choosing a dispute resolution process; and
• methods and providers of dispute resolution that you can choose from. 

What Dispute Resolution Process Should My Business Use?

There are two key questions that you should ask yourself when you are determining what method of dispute resolution your business should adopt. 

There may be a:

• dispute resolution clause in the agreement or contract you have with this conflicting party. It could outline a particular procedure for settling conflict; or
• process that your business has adopted in the past to settle this type of dispute. 

When answering this question, you may consider:

• the amount of money you can spend to settle your dispute;
• the amount of time you have available to resolve these issues; 
• whether you wish for a third party to be involved;
• the nature of your relationship with the disputing party; and
• whether you wish for the outcome of the dispute resolution process to be binding. 

Alternative Dispute Resolution

Alternative dispute resolution (ADR), is any dispute resolution procedure that does not involve you and the conflicting party going to court. These processes can be assorted into two categories:

• consensual; and
• determinative. 

Consensual 

A consensual alternative dispute resolution process is where conflicting parties collaborate to resolve their conflict. Negotiations and mediation are the two most popular consensual dispute resolution processes.

In a negotiation, the disputing parties, either independently or through representatives, work together and communicate to reach a resolution to their dispute. Alternatively, in mediation, an impartial third party facilitates this negotiation process. This third party is known as the mediator. However, the mediator is not a decision-maker. Rather, they assist the parties in coming to their own resolution. 

Determinative 

Additionally, a determinative alternative dispute resolution process involves a third party who determines the outcome of your dispute. The most popular determinative process to settle business or commercial disputes is arbitration.

In arbitration, both parties agree to have your dispute referred to and resolved by an independent third party. This third party is known as the arbitrator. Furthermore, the arbitrator will consider both sides of the dispute and come to a final decision that is binding on both parties.

Online Dispute Resolution

Dispute resolution is ever-changing. Therefore, online dispute resolution has grown increasingly popular to settle both online and offline business disputes. Online dispute resolution, or ODR, refers to the use of the internet to assist in resolving conflicts using alternative dispute resolution concepts. Further, ODR can range from online versions of ADR methods to specific online procedures. These procedures tend to involve or completely rely on artificial intelligence or AI.

The Disputes Tribunal

If alternative dispute resolution methods are not effective or well-suited to your dispute, you may have to seek out legal action. However, before engaging in litigation, your business may wish to consider going to the Disputes Tribunal. 

The Disputes Tribunal is a private forum where your business can settle its disputes through a hearing process. Further, the Tribunal can deal with:

• small claims that range up to $30,000;
• disputes concerning contracts; and 
• disputes about business deals and agreements. 

You can place a claim with the Disputes Tribunal by:

• applying online. Your application will be sent to the Tribunal who will confirm the application and schedule a hearing to settle your dispute; or 
• filing a claim paper. You will need to fill out this paper and mail or deliver to the Disputes Tribunal. 

Litigation

Litigation, or going to court, should always be viewed as a last resort to settling your dispute. This is because it can be:

• time-consuming;
• expensive, as your business may have to pay court fees, disbursements and the cost of legal representation; and
• inflammatory to your dispute. 

You can bring your case to the:

• District Court, if your claim is for less than $350,000; or
• High Court, if your dispute is complex or you are claiming more than $350,000. 

Key Takeaways

It is inevitable for conflicts when you deal with other businesses. However, it is crucial that you handle these disputes in a well-suited manner to the conflict and your business’s needs. Therefore, you may wish to settle your dispute through:

• alternative dispute resolution methods, such as negotiation, mediation or arbitration;
• online dispute resolution;
• the Disputes Tribunal; or
• litigation. 

If your business needs assistance in resolving a dispute, contact Legalvision’s disputes lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions