Commercial dispute resolution: navigating the economic downturn
06 February 2023
After-shocks of the COVID-19 pandemic, the war in Ukraine, sky-high inflation, “mini-budget” fiascos and the revolving door of number 10: as we settle into 2023, many of the political, humanitarian and economic events of 2022 and beyond continue to have a huge impact on businesses grappling with uncertainty and financial instability.
Unfortunately, we anticipate that present conditions mean contentious issues of various kinds are likely to crop up, from supply chain issues and cashflow problems to businesses being unable to pay their debts and potentially becoming insolvent. If disputes arise, it is best to be prepared – whether your business is on the receiving end of a claim, or contemplating bringing one itself.
We have produced a number of guides on key issues that we consider businesses should be thinking about or may encounter in the coming months. The topics we cover are:
- Why is pro-active contract management so important now more than ever? Read more here.
- What contract provisions may assist with the management of cash flow? Read more here.
- Are contract amendments made in an economic downturn legally binding? Read more here.
- How can you mitigate the impact of inflation and supply chain disruptions on commercial contracts? Read more here.
- What routes are available to creditors to recover unpaid debts? Read more here.
- How do you deal with a counterparty who is facing insolvency? Read more here.
- Post-transaction disputes: what do buyers need to think about when considering bringing a warranty claim under an SPA? Read more here.
If you have any queries, please do not hesitate to contact a member of our Dispute Resolution team.
We have created an initiative called “LS Unlock” to help businesses access legal advice during the uncertain times ahead. LS Unlock comprises a free initial assessment of significant commercial claims together with a menu of alternative fee arrangements which can reduce and, in certain cases, eliminate the upfront cost of pursuing a claim. This initiative has been designed specifically to assist clients in this uncertain economic climate and is part of our commitment to working with clients to help them survive its effects.
Also in our economic downturn series…
The importance of pro-active contract management in an economic downturn03 February 2023
Efficient contract management is an essential part of running any business. This is never more important than during times of economic uncertainty when businesses need to keep a close eye on contract performance, regularly review and monitor whether contracts still meet the business’ changing requirements and remain vigilant to the key indicators of potential failings or breaches.
Contractual ways to improve cash flow03 February 2023
It’s been a challenging couple of years for the UK economy. Businesses have had to grapple with Brexit uncertainty, the Covid-19 pandemic and the Russian invasion of Ukraine all affecting trade. These have in turn resulted in higher costs, compounded by inflationary pressures.
Dealing with a counterparty who is facing insolvency03 February 2023
There’s been widespread coverage of the impending economic downturn. The pressures of the war in Ukraine, the consequential energy crisis, high inflation and labour shortages have combined to create forceful economic headwinds.
How to mitigate the impact of inflation and supply chain disruptions on commercial contracts03 February 2023
These are undoubtedly difficult times for businesses. Supply chain disruptions that emerged following the pandemic have contributed to a burst of global inflation which has led to record increases in costs such as energy, wages and transportation as well as higher interest rates.
Post transaction disputes: bringing warranty claims – key considerations03 February 2023
The current economic climate may mean that recent purchasers of companies are looking to achieve an after-the-event price reduction, especially where the value of the company they have purchased may have fallen. One way of doing this may be to make a claim under the warranties in the share sale and purchase agreement (“SPA”).
Are contract amendments made in an economic downturn legally binding?03 February 2023
Performing obligations in commercial contracts in the current downturn is a serious challenge for some businesses. Sometimes that challenge will be so great that it is the catalyst for a breakdown of a business relationship. But where there is a common desire to get through these tough times, the focus may be on how contractual terms might be varied to ensure that both parties are able to survive.
How can I recover unpaid debts?03 February 2023
Even without a difficult economic landscape, establishing a strategy to recover a debt can make the difference between sitting comfortably and struggling through. It’s important to be aware of the different routes to recovery – and their limitations. Use this overview to understand your options and which option is best for your circumstances.