14 December 2021

Think twice before your pre-Christmas clear-out

I recently read an article written by a solicitor-turned-barrister which set me thinking about transactions which turn bad. As a transactional lawyer, I am well aware that on occasions, relations between parties sour and disputes arise, so how can parties reduce the risk of time-consuming and costly litigation at the outset?

First, be aware that no matter how good relations are when negotiating and first entering into a transaction, things change. Financial difficulties, tough targets or new personnel, for example, can cause strain and a great relationship now might not always stand the test of time.

Second, instruct lawyers to advise you and document your deal. Agreeing terms on the back of an envelope may save you time and money in the short-term but when things go wrong, it’s very difficult to evidence your original intentions and the terms agreed. Which brings me onto the next point…

Third, don’t throw away potential evidence; physical evidence will often hold more weight in court than a witness statement. A key point in the article I mentioned earlier, it is particularly relevant at the current time when many businesses are downsizing office space and going paperless. Whether you’ve done a property deal and have copies of old plans and photographs of the site or have entered into a loan with security and have finance records and share certificates, don’t be tempted to reduce clutter on the basis they’re no longer needed; they may well be if a deal or term of a deal is called into question.

And finally, as my litigation colleagues would say, don’t wait until the final hour to call in the lawyers if a dispute seems likely. Taking legal advice, for example at an early stage of a disagreement or as soon as you realise a payment cannot be met, can often resolve the issue speedily and amicably.

Naomi is a Partner in our Corporate team.

Disclaimer

This note reflects our opinion and views as of 7 December 2021 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.

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