As businesses grow and change, challenges can arise that lead to disagreements and conflict. These might involve the people running the business, the terms of important contracts, or the way property and finances are handled. Such issues can disrupt day-to-day operations and create stress for everyone involved.
This guide looks at some of the most common types of conflict businesses may face and explains how litigation and dispute resolution can step in to help. By understanding your options, you can deal with disputes in a way that protects your business and keeps it moving forward.
Disputes between shareholders
Running a business comes with its fair share of hurdles, and disagreements between shareholders can be one of the more challenging issues to face. These disputes might centre on how profits are shared, the future direction of the company, or if someone feels an agreement has been broken. Examples include:
- Disagreements over company direction and management: when shareholders can’t agree on how the business should grow or who should make key decisions.
- Dividend policies and profit distribution: conflicts about how and when profits should be paid out.
- Breach of shareholder agreements: one party not following the terms everyone originally signed up to.
- Allegations of misconduct, negligence, or exclusion of minority shareholders: claims that some shareholders are being treated unfairly or left out of key discussions.
- Unfair prejudice claims and director disputes: situations where minority shareholders feel decisions are harming their interests, or directors are clashing over how the business should be run.
Conflicts among directors
Conflicts among directors – often called boardroom disputes – can create tension at the top and ripple through the rest of the business. These disagreements can arise over how the company is run, the responsibilities directors owe, or the overall strategy being pursued. Examples include:
- Disagreements on company direction or strategy: when board members can’t align on long-term plans or priorities.
- Conflicts of interest: situations where personal interests might clash with what’s best for the company.
- Personality clashes: differences in working styles or leadership approaches causing friction.
- Perceived underperformance: concerns about whether a director is meeting expectations or delivering results.
- Breaches of directors’ duties: such as misappropriating assets or failing to act in the company’s best interests.
- Conflicts over director remuneration or dividends: disagreements about how directors are rewarded or how profits are shared.
Disputes concerning commercial property
Disputes concerning commercial property can be frustrating and time-consuming, especially when they affect how your business operates day to day. These disagreements often centre on lease terms, unpaid rent, or restrictions on how a property can be used. Examples include:
- Lease disputes: such as non-payment of rent or disagreements over lease terms.
- Boundary disputes: conflicting property lines or unclear land ownership.
- Service charge disagreements: rows about who pays for maintenance or shared facilities.
- Dilapidations: when a tenant fails to return a property in the required condition at the end of a lease.
- Repair and maintenance responsibilities: uncertainty over who is responsible for upkeep or fixing issues.
- Breaches of covenants: breaking the rules set out in the lease or title deeds.
- Disputes over planning permissions and land use: challenges to development plans or restrictions on business activity.
Issues relating to debt
Issues relating to debt can quickly disrupt the way your business runs. When customers or clients don’t pay for supplies or goods, the cash you were relying on to cover expenses isn’t there when you need it. This can make it harder to pay your own suppliers, invest in new stock, or keep up with everyday running costs like wages and utilities. Over time, unpaid debts can limit growth, put pressure on day-to-day decision-making, and make it difficult to plan ahead with confidence.
Employment disputes
Employment disputes can be challenging for any business, affecting both morale and productivity. These issues arise when there’s a breakdown in the working relationship between employees and employers, and can quickly lead to tension across a team if not handled well. Examples include:
- Dismissal: when an employee disputes the reason or process behind losing their job.
- Pay: disagreements over salary, bonuses, or holiday pay.
- Working hours: issues with contracted hours, overtime, or flexible working requests.
- Promotions: concerns about fairness or how career progression is managed.
- Changes to terms and conditions: disagreements when contracts or policies are updated.
Misrepresentation claims
Misrepresentation claims can arise when one party makes a false statement of fact or law that persuades another to enter into a contract. This can lead to financial loss, wasted time, and frustration when the truth comes to light. For example, a business might be told inaccurate information about the profitability of a venture, the condition of equipment being sold, or the terms of a service being offered.
When the reality doesn’t match what was promised, the affected party may seek to challenge the agreement or recover losses. These claims often come with disruption, as they can stall projects, impact relationships, and draw resources away from day-to-day operations.
Finding resolutions to business disputes
Finding resolutions to business disputes can feel daunting, especially when you’re already focused on running and growing your company. Working with lawyers who have experience in resolving commercial disagreements can make the process much easier to manage. They can step in early to assess the situation, review the relevant contracts and evidence, and advise you on the strength of your position. By handling correspondence with the other party, negotiating settlements, and preparing any necessary legal documents, they take the weight of the dispute off your shoulders.
This support allows you to avoid being drawn into time-consuming meetings and complex legal arguments, giving you the space to concentrate on the daily demands of your business. Lawyers can also step in to protect your reputation by managing communications carefully and working towards solutions that keep disputes as private as possible. Their involvement can help avoid lengthy and expensive litigation, saving money and freeing up resources to invest elsewhere. With the legal side managed for you, you and other stakeholders can remain focused on strategy, growth, and keeping the business running smoothly.
While many different issues can lead to conflict within an organisation, knowing where to turn when it happens can make all the difference. Having the right support in place protects your company, safeguards your interests, and helps you move forward without unnecessary disruption.