Top Ten Tips: Solving problems before they get out of hand

* Good communication and mutual understanding can prevent a dispute from occurring.

* Make sure all contracts are professionally drafted. They should set out exactly what is expected of everyone and the remedies available in events of defaults.

* Take legal advice before considering pursuing litigation. It can be far more costly to inadvertently prejudice your own case.

* Keep records of all your transactions. Claims can turn on who has the best evidence of what happened or what was intended. Producing a letter or email can avoid or settle a dispute early on.

* Narrow the issues. Often, a letter which identifies the problem, what you require to put it right and the timescale can help lead to a resolution more efficiently.

* Consider a warning. It can be worth spending a little bit of money on a legal letter which highlights the potential of increased fees, costs and interest should the matter not be resolved peacefully.

* Consider mediation and arbitration. This allows both parties to make a legally binding agreement.

* Do your research. A judgment in your favour can be nothing more than an expensive piece of paper if the other side has no assets and no means to pay.

* Consider your funding options. Legal expense insurance might fund your solicitor’s fees while some firms offer funding arrangements such as fixed fees and conditional fee agreements.

* Be aware of the long-term implications. Litigation can damage business relationships forever. An amicable settlement might earn you more in the long run.

Alex Dunne, solicitor at Simpson Millar Commercial.