Business disputes are stressful and can be costly, but there is a sensible, staged way to handle them in England and Wales, and a range of legal routes depending on the type of dispute. Going straight to court is rarely the best first move. Here is a plain-English guide.
First steps when a dispute arises
- Stay calm and gather the facts, collect the contract, correspondence, invoices and any evidence.
- Check the contract, for terms on the issue and any dispute-resolution clause (e.g. requiring mediation or arbitration) you must follow.
- Communicate, a clear, businesslike letter or conversation often resolves things, and shows good faith.
- Take early advice, for anything significant, a solicitor can assess your position and the options.
Try to resolve it without court (ADR)
Courts expect parties to consider Alternative Dispute Resolution (ADR) before litigating, and unreasonable refusal can mean costs penalties. Options include:
- Negotiation, direct settlement talks.
- Mediation, a neutral mediator helps you reach your own settlement (confidential, fast, high success rate).
- Arbitration, a binding private decision (often required by a contract clause), under the Arbitration Act 1996.
- Expert determination / adjudication, for technical or construction issues.
The legal routes, matched to the dispute
The right forum depends on what kind of dispute it is:
- Employment disputes, go to the Employment Tribunal (after Acas early conciliation) for claims like unfair dismissal or discrimination.
- Most commercial/contract/debt disputes, the County Court (with the small claims track for lower-value claims, designed to be used without a solicitor), or the High Court for higher-value or complex matters.
- Money owed by a solvent company (undisputed), a statutory demand and potential winding-up petition under the Insolvency Act 1986 can be powerful (but never use it for a genuinely disputed debt).
- Money owed by an insolvent debtor, engage with the insolvency process (administration, liquidation, bankruptcy) to claim as a creditor.
How court litigation works (in outline)
- Follow the relevant pre-action protocol (e.g. a letter before claim).
- Issue a claim under the Civil Procedure Rules; the case is allocated to a track by value and complexity.
- The court sets a timetable (statements of case, disclosure, evidence, trial).
- Most claims settle before trial; outside the small claims track, the loser usually pays much of the winner's costs (on the small claims track, recoverable costs are very limited, so the ordinary costs-shifting rule does not apply there).
Practical tips
- Act promptly, limitation periods apply (generally six years for contract claims; shorter for some others).
- Keep good records and mitigate your losses.
- Weigh cost vs benefit, litigation is expensive and uncertain; settlement is often better commercially.
- Follow any contractual dispute clause and try ADR first.
Key takeaways
- Start by gathering facts, checking the contract (and any dispute clause), communicating, and taking early advice.
- Try ADR (negotiation, mediation or arbitration) before court; unreasonable refusal can cost you.
- Match the forum to the dispute: Employment Tribunal (employment), County/High Court (commercial/contract/debt), or insolvency routes for company/personal insolvency.
- Act within limitation periods, keep records, and weigh cost vs benefit, most claims settle.
Sources
- Civil Procedure Rules (litigation; tracks; costs; ADR); Arbitration Act 1996 (as amended by the Arbitration Act 2025)
- Acas early conciliation and the Employment Tribunal (employment disputes); Insolvency Act 1986 (statutory demands, winding-up, bankruptcy)
- Limitation Act 1980 (time limits for claims)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.