There are many areas of dispute that can arise between shareholders and a company, or among company office holders. Our brilliant team has advised numerous shareholders over the years and successfully settled many disputes.
If shareholders have a shareholder agreement in place, then this can go a long way towards resolving disputes. A well drafted shareholder agreement can set out the resolutions in the event of a potential dispute and how a dispute should be resolved and settled.
If there is no shareholder agreement in place, there may be certain boundaries and parameters set out in the company’s Articles of Association, but these are often standard template Articles which do not cover what should happen in the event of a dispute.
Settlement
Disputes may be resolved by court proceedings. However, this can be expensive, and is unlikely to lead to anything other than the exiting of the aggrieved shareholder, and a breakdown in relationship which is irretrievable.
However, if the parties can reach a settlement on a dispute, then the chances of being able to move forward, possibly in the same direction again, are far higher.
Settlement meetings and negotiations
At Francis Wilks & Jones we frequently act in shareholder disputes by settling these using without prejudice settlement negotiations. These negotiations involve a meeting of the parties with independent professional experts. Just having an independent input can often help parties to take a step back and de-personalise disputes, so that they can be resolved effectively by way of a settlement.
A without prejudice settlement meeting will inevitably be cheaper than court proceedings for the parties, and are can also be cheaper than formal mediation or alternative dispute resolution services.
Mediation and Alternative Dispute Resolution
If it is not possible to settle a dispute by way of without prejudice settlement negotiations, then inevitably mediation or alternative dispute resolution procedures can be more beneficial to the parties than going to court. Claims can be settled fairly quickly and cost-effectively by using an alternative dispute technique, without involving the court, or by using a formal mediation process. These can be extremely successful in resolving differences between parties and avoiding significant legal costs of going to court. See: Mediation and alternative dispute resolution services.
If you are experiencing areas of concern with your fellow shareholders or with the company, the earlier you act the less chance of a dispute getting out of hand and a settlement becoming less and less likely. However, at Francis Wilks & Jones, we have had many successes in settlement negotiations at all levels and in all types of disputes, avoiding costly court proceedings. Contact one of our expert team today if you would like to talk through your options in this area.
