Solicitors in Birmingham

How do disputes between shareholders arise ?

There are a myriad of ways in which these disputes flare up but some of the more common are over :-

• strategy
• dividends
• salaries paid to shareholders who also work for the business
• unfair contributions of money and/or time by shareholder
• conflicts of interest
• minority shareholders prejudice
• agreeing a price for shares on sale

Mediation – is it any good and worth considering ?

Mediation is becoming increasingly popular and there are sound reasons for considering it. Generally :-

• The timing is important – sugegsting mediation before the strengths and weaknesses of both sides case are cleraer can be a waste of time, and considering it just before trial may also be counterproductive

• It can be a quicker, less expensive and private way of settling a dispute but needs the consent of both parties

• Can work well when parties wish to have an ongoing business relationship.

• Unless and until a formal settlement is agreed, the process is “Without Prejudice” and confidential

• In general it relies on both parties accepting the need for compromise and that court litigation rarley has an outright winner

• On average  it takes about 1 day, as otherwise it doesn’t work. The success rate is impressive at around 80%.

What are the basics of breach of contract ?

The important starting point is to understand that not all contract clauses are of equal importance, some are more important than others, and common sense usually indicates which clauses go to the heart of the agreement and which do not. If a breach is sufficiently serious it may be a fundamental breach of contract. This is very important as only a fundamental breach entitles the innocent party to rescind (cancel) a contract. Compensation would then not be payable and acting on the breach quickly is also important i.e with a new car if there are grounds to reject it, they must be acted on fast.

Breaches of contract terms which are not fundamental terms entitle the innocent party to financial compensation, but such “compensation” under English law is generally about proving loss not annoyance or upset . An innocent party is also subject to a legal duty to mitigate his/her/it’s losses.

What are the possibilities with litigation insurance policies ?

Such policies are becoming inceasingly useful tools for business. there are 2 basic types :-

• A “before the event” insurance policy is a legal expenses insurance policy purchased and on cover before any dispute arises. For an annual premium cover is provided for potential future legal problems.

• An “after the event” insurance policy can be sought after a dispute has arisen to protect against the risk of losing and having to pay an opponent’s costs, and sometimes to cover the insured’s own legal costs. Premiums vary and of course depend upon the insurers analysis of the strengths and weakness of the underlying case. The insurer may also have a say in any tactical negotiations with the opponent.

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