In my 35 years of practice, I have litigated many business disputes that likely could have been avoided. I have noted that there are a handful of proactive, common sense steps businesses can take that will significantly reduce the risk of disputes resulting in litigation. Most of these will also improve the chance of success if the dispute needs to be litigated. My top five are as follows:
- Provide high quality goods and services. Stake your reputation on the goods and services you provide to your customers. If customers are happy with what you are selling, then they are less likely to have any complaints. Even if things go sideways from time to time, the customer will be more understanding knowing of your reputation of seeking to provide only the very best to customers. A reputation takes many years to build, but can be permanently damaged overnight. Maintain your high standards at all times and do not accept second best in any circumstance.
- Ensure employees do good work. Provide your employees with proper training and instruction. Make sure they understand your high level of expectations of their work. Have clearly documented rules and protocols for their performance. Monitor and enforce when necessary. Remember that employees are the face of the business that can improve or harm its reputation. Their commitment is crucial and so, value your employees as important members of the team and compensate them accordingly.
- Respond to customer complaints and concerns in a timely fashion. Do not ignore them. In most cases, complaints and concerns can be easily addressed, much more efficiently and effectively than ending up in litigation or reputation damaging harm from social media attacks by a dissatisfied customer. Do not delegate the complaints portfolio to a junior staff member as complaints managed by the boss are more likely to be satisfactorily resolved.
- Document, document, document. Make sure business transactions are properly documented whether by way of formal contract or other agreement in writing that clearly sets out the obligations of parties. It is also important to keep good business records with respect to the goods and services being supplied in order to document that proper business practices have been followed throughout. All important communications with the customer should be documented, especially if there are any complaints or concerns raised by the customer. Detailed contemporary records are often the very best defence to any claim.
- Make sure your business is properly insured, including comprehensive liability coverage. Insurance can be costly, but it is critically important to ensure the business is protected in the event that a claim is brought. Unforeseen adverse events do occur. Mistakes can occur at any time. Insurance protects the business, not only for these unforeseen losses, but also with respect to the cost of defending the actions. Legal fees of defending claims can be very expensive. Insurance coverage should be carefully reviewed each year to ensure that there is appropriate insurance in place to respond to reasonably foreseeable claims that can arise in your business.
All of these very simple steps can go a long way to ensure that your business will continue to be productive, profitable and rewarding for many years to come.