Disputes are an inevitable part of business, whether involving unpaid goods or services, or contractual breaches by suppliers. Resolving these issues effectively requires a structured approach, balancing legal expertise with practical negotiation skills. Below, we outline the key steps in the dispute resolution process, detailing how each phase contributes to resolving conflicts efficiently.
1. Determine Strategy and Goals
The first step is to establish a clear understanding of the case and define the desired outcome. This involves:
- Reviewing evidence and case documents: Analyzing contracts, correspondence, invoices, and other supporting materials ensures that the claim is well-founded.
- Researching the defendant's legal status: Examining the opposing party's registration details, financial standing, and solvency helps determine the feasibility of enforcement.
- Researching recent litigation cases involving the defendant: Reviewing the defendant's history of disputes provides insights into their typical responses and risk exposure.
- Drafting a report on findings: This document consolidates the research and analysis, forming the foundation for strategic decision-making.
2. Collect Evidence
In cases where additional evidence is required:
- Conduct trap purchases and notarize as evidence to verify breaches of agreements e.g., for IP infringements
- Secure evidence through notarization or other authentication methods to strengthen the case e.g., for infringing content on websites
This step ensures that all available facts are gathered before escalating the matter and avoiding that the other side deletes evidence.
3. Demand Letter
A demand letter represents the first formal step in addressing the dispute. It outlines the claim, provides supporting evidence, and seeks resolution without resorting to litigation.
- Draft and send the demand letter: The letter should clearly state the nature of the dispute, the remedy sought, and a deadline for response.
- Follow-up and negotiate: Proactive engagement through phone calls, emails, or meetings can lead to a quicker resolution while maintaining professional relationships.
4. Court Filing
If negotiations fail, the next step is to initiate legal proceedings. This involves:
- Drafting the claim: The claim document must clearly articulate the facts, legal basis, and relief sought.
- Communicating with the court: Ensuring that the claim complies with procedural requirements and filing deadlines is critical.
- Preparing evidence: Authentication, translation, and notarization of evidence may be necessary, depending on the jurisdiction. Properly organized evidence strengthens the case in court. Courts in China can have a high threshold for accepting evidence. For foreign parties, this may mean that evidence from their jurisdiction may need to go through a lengthy authentication process, which needs to be accounted for in preparations to ensure that it can be used in court.
- Placing liens on property and freezing bank accounts: This can be a useful tool to put pressure on the other side to agree to a favorable settlement.
5. Representation in Court Hearings
Once the claim is filed and accepted, the court will arrange the first hearing.
- Cases typically involve at least 1–2 hearings, depending on their complexity.
- During hearings, evidence is presented and examined by the other side. Both parties have the opportunity to respond to arguments from the other side. Effective representation ensures that the client's interests are fully advocated for throughout this process.
6. Settlement Negotiations
Settlement negotiations can occur at any point during the process, even during court proceedings. Courts actually prefer settlement in most cases without their involvement and actively encourage it.
- Reaching a settlement avoids further costs and delays associated with litigation.
- Once terms are agreed upon, a legally binding settlement agreement should be drafted to protect all parties involved.
7. Enforcement of Court Ruling or Appeal
After a favorable judgment, the final step is enforcement. If the defendant fails to comply with the court's ruling, enforcement measures may include:
- Seizing funds in previously frozen bank accounts
- Forcing liquidation of non-cash assets
Alternatively, if the outcome is unfavorable, an appeal may be considered, depending on the circumstances and legal advice.
A Structured Approach to Resolution
Each step in the dispute resolution process builds upon the last, ensuring thorough preparation and a strategic focus. Understanding these phases allows businesses to approach disputes with confidence and clarity.
By following this progression, parties can often resolve disputes efficiently, whether through negotiation, litigation, or enforcement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
