Category: Blog Post

Falling out with my business partner – what next?

Andrew Marsden

“We were best friends when we started our business – and now? I just hate him.”

Sadly, the above sentiment is one I often encounter. So, what can you do if you’ve fallen out with your business partner or fellow director?

Ironically, this is a scenario you probably never anticipated. When business relationships start out, it can be difficult to envisage things ever turning sour. Why would you expect and plan for the worst to happen? The start of a new business venture is an exciting and motivating time. More often than not, business relationships are forged out of a passion and a shared vision of what can be achieved.

Unfortunately, things don’t always stay that way. Once the ‘honeymoon period’ is over, it’s quite common for cracks to start to appear. For some, these can be filled or at least papered over with little long-term impact, but for others, those cracks start to deepen. When that occurs, it can have serious consequences for you and your business.

Shareholders, directors and partners fall out for a multitude of reasons. Typically, these might involve the diversion of business opportunities or the misappropriation of funds or assets. Perhaps someone has been caught with their “fingers in the till”. Sometimes one person may feel they are being excluded or left out of business decisions. Such scenarios feel unfair and prejudicial. Though the cause of the relationship breakdown may differ from case to case, the route to resolution is what’s important here; and there are several key stages to getting there.

Do you have a shareholders’ agreement already in place?

I always recommend those involved in business together ensure that they have a properly prepared shareholders’ or partnership agreement in place from the outset.  It will help to define shareholder or partner responsibilities, assist in the smooth running of the business and provide a mechanism for effective resolution of any disputes that might arise. Perhaps even more importantly, the presence of a decent shareholders’ or partnership agreement can actually help reduce the chances of future conflict.

It may now seem like a far and distant memory but, when you first entered into your business relationship, did you actually enter into a shareholders’ or partnership agreement? Perhaps you were keen to have an agreement in place from the outset. You may have had one drawn up on a recommendation. You might simply have had one prepared because it felt like the right thing to do. 

If so, it is really important to familiarise yourself with its contents. It’s crucial you understand the details of any agreement that you have entered into and how it might affect or provide a route to the resolution of any dispute you might find yourself in.

Get experienced specialist legal advice.

Take legal advice early on. Engaging a specialist and experienced barrister might well be the cheapest and best way of ensuring that the route to resolution is as fast and stress-free as possible. 

You can get advice from an experienced specialist barrister directly and without the cost of engaging a solicitor. Very often, the fees of barristers, who face limited overheads that need to be covered, are substantially less than those of solicitors and you will be getting advice straight from the “horse’s mouth”.

A specialist and experienced barrister will be able to identify any provisions in a shareholders’ or partnership agreement (including any concerning the exit of a participant) that might assist you. Your barrister will be able to give you a clear understanding of what impact they may have and advise on the next steps to take to achieve a resolution. 

What might those next steps look like?

Commonly a shareholders’ or partnership agreement will include provisions that can be used to resolve disputes or will, at least, set out procedures for doing so. 

Typically, these might require one shareholder to sell their shares, cease to be a director and leave the company. However the process of removing a shareholder/director from the business can be complex and great care is required to avoid it backfiring. Again, a specialist barrister will be able to advise as to the options available and the procedures to be followed. 

While complications can arise, having one shareholder walk away from the business receiving a fair value for his interest can often be the most straightforward solution. Indeed, in my experience, shareholder disputes can often be resolved in this way quickly, at a limited cost and in a way that minimises disruption and damage to the business.

What if there is no shareholders’ agreement in place?

A surprising number of businesses don’t have any shareholders’ or partnership agreement in place. If you are in that position, all is certainly not lost. 

Again, seek early specialist advice from someone experienced in the resolution of these disputes who can guide and navigate you through the process towards resolution.

Initially, you will need to consider negotiation or mediation as strategies to try to achieve workable compromises while keeping relationships as amicable as possible. Your barrister should advise you on the best approach to take and what you might realistically hope to achieve in your particular circumstances. It is nearly always preferable, from time, money and minimal business disruption perspectives, to achieve resolution in this way rather than through the courts.

In other cases, litigation may be inevitable. It may be the only way to achieve a resolution. It may provide the catalyst that gets everyone talking sensibly. Generally, this begins with pre-action correspondence which may itself lead to resolution early on but you need to guard against getting bogged down in pre-action correspondence as it can involve substantial cost and may only serve to further alienate the protagonists rather than further the prospects of resolution. If a negotiated settlement cannot otherwise be achieved, it may be necessary actually to issue proceedings and follow the litigation process. That process involves an exchange of statements of case, disclosure of documentary evidence, the provision of witness statements and expert evidence and, eventually, if necessary, a trial and a determination by a judge. However, it’s important to be aware that settlement can be achieved at any time during this process and that very few cases actually go so far as reaching a trial and a determination by a judge. 

Once again, you should turn to a specialist and experienced barrister who will work with you throughout the entire process from start to finish and ensure that, whether or not a shareholder or partnership agreement is in place, your dispute is resolved amicably, on the best terms and as cost-effectively and as efficiently as possible.

To find out more, please get in touch by calling me on 07718 883094 or emailing andrew.marsden@commercialchambers.org. 

A thirty-minute initial conversation is free, and I’d be very happy to talk you through the options available and advise on the best route to take to achieve resolution in your particular situation.

Are you feeling betrayed? Has the trust gone from your business relations?

Andrew Marsden

Have you ever been in a position where you’ve discovered your business partner has their fingers in the till; syphoning off company money?

It’s a really painful, frustrating and unsettling situation to find yourself in. And you’re scared to confront your partner for fear of opening a whole “can of worms”.

With emotions running high, it can be very difficult to see a clear path. Even knowing where to start can be overwhelming. So, what are your options?

1. Enlist the help of an experienced specialist

When you’re embroiled in a feud with a business partner – particularly one that is fuelled by strong emotion – don’t try to battle it out on your own or with inexperienced or non-specialist legal advice. This very rarely works out for the best. Disputes quickly deepen, and the greater the degree of conflict, the less chance there is of resolving differences and enabling both sides to walk away with your commercial and financial interests protected and preserved.

Right from the start, get the best advice you can. The best source of such advice is often an experienced specialist barrister. They should be able to advise you on the best and most effective and economic path to take. You can do so under the Bar Council’s Direct Access scheme without having to engage a solicitor and so substantially reduce the costs involved. In doing so, you will no doubt save yourself a lot of time, stress, worry and, potentially, money.

2. Check the terms of your company’s articles of association and any shareholder’s agreement or your partnership/LLP agreement

The terms of your articles of association, shareholders agreement, partnership or LLP agreement can be incredibly effective in providing routes to a resolution. If they have been carefully drawn up, they should provide mechanisms for resolving disputes cheaply, effectively, efficiently and with the least possible damage to your underlying business and its value to you.

I always recommend having such agreements in place from the outset. If you haven’t got such agreements in place, do not delay. Get them put in place as soon as possible before any dispute arises. Again, speaking with an experienced specialist barrister about this will ensure you are protected should the worst come to the worst.

3. Use effective negotiation and mediation to try and resolve any dispute and avoid litigation

More often than not, properly prepared for and conducted negotiation or mediation should be capable of resolving disputes without resorting to any actual litigation; even if things might seem beyond repair. I always try to ensure that a sensible and fair compromise is reached with both parties being able to walk away satisfied, even if relationships might not always remain intact. Litigation should really be considered the last resort.

4. If legal action is required, then go ahead and take it!

If a dispute cannot be resolved without it then don’t be afraid to turn to litigation. For example, the courts have power under section 994 of the Companies Act 2006 to grant relief where the affairs of a company are being conducted in a manner unfairly prejudicial to some of its shareholders and, where it is appropriate to do so, you should use it.

But just make sure you use it when it’s right to do so, that it doesn’t come back to bite you and that you don’t end up regretting it. Again, turn to an experienced and specialist barrister.

When my clients instruct me under the Bar Council’s Direct Access scheme, they are often surprised by how effective it is and how reasonable the legal fees are compared with using a solicitor.

Certainly, a good barrister should ensure you are well informed, well prepared, confident in any litigation and be transparent about the costs involved. And remember, never be afraid to ask questions; if anything is unclear or simply doesn’t feel right then demand an explanation.

What are your options?

Finding yourself in the midst of a business dispute is never fun or easy, particularly if there are feelings of resentment and ‘wrongdoing’ involved. Don’t try and fight your way through by yourself – even if you are not sure whether action is needed or just want to find out what your options are, please do get in touch with me.

I offer a Free 30-minute initial consultation and I’m sure I can give you some helpful guidance as to the best way forward.

But our business became our worst nightmare.

Andrew Marsden

Picture the scene. If one thing helped a ‘work from home’ mentality, it was the Covid pandemic; then we all worked from home, and many have never gone back.

Dave, one of the directors, moved to Spain just after we could all move around again and now works from Alicante. He still takes his salary, and last year the three of us paid ourselves a bonus too. He is doing alright, yet, I’m not really sure he is doing any work at all as he seems to be eternally on holiday. You only need to look at his FaceBook feed to see that. And he’s not been to see a client for ages!

He’s also helped himself to cash in the business bank account for some expenses that have nothing to do with the business.

We’re fed up with carrying him. We’ve had a number of heated and unpleasant conversations about his future. Yet our shareholder agreement does not cover this scenario. We want him out but we’re not sure what we can do.

Business start-up

Whether you’ve just started a new venture with a friend or colleague or have been in business for years, trust will be at the core of your relationship; it is very much the glue that brings and holds that relationship and the business together.

So, if trust in a business relationship suddenly disappears or gradually breaks down the impact can be far-reaching. For most, it will be both demoralising and upsetting and for many, it can be really devastating; especially when your business and its finances are compromised as a result.

Consider potential fallouts before a dispute arises

Before you face such a situation, there are things you can and should do to make life easier if the worst comes to the worst. Preparing for any future dispute does not represent a lack of confidence; it is not the same as believing that your relationship will not last. Rather, planning for any possible eventuality is the prudent course.

No matter how long you have known your partner(s) and how strong your business relationship is, disputes can and do arise sadly all too often. When they do, you want to be sure you have a strong and sensible shareholders’ agreement in place. A carefully prepared shareholders’  agreement should not only protect you from the consequences of a fallout but also provide the practical and cost-effective means for achieving resolution of any future disagreements or disputes.

Record your understanding and expectations in a written shareholders’ agreement

The best way to avoid disagreements over who is responsible for what or how your business should be conducted is to clearly set out right from the start what you have agreed, what are all parties’ expectations and the resolution processes to be adopted if differences of opinion or dispute should arise.

Don’t just agree on these matters verbally but record them in clear written form and in a legally binding document so that everyone concerned knows the position from the outset and everyone has a written record that they can refer to when the need arises. A shareholders’ agreement is not a legal requirement, but one prepared by an expert with real experience in this field will certainly make things much simpler, clearer and more straightforward if you should face disagreement or dispute in due course.

Indeed, an effective shareholders’ agreement should provide the framework for resolution. It is relatively inexpensive and can save you a lot of money further down the line.

Consider mediation

If you already find yourself in dispute with your fellow director or shareholder, then don’t immediately turn to litigation. Although when in the midst of a dispute, it can be hard to see a way out, the chances are your dispute can be resolved without having to go to court. Mediation is a really effective way of achieving dispute resolution and, again, is best conducted by an experienced and trained professional.

Seek legal advice as early as possible – FREE thirty-minute consultation

I offer an initial FREE thirty-minute consultation, so you don’t have to wait until you are in the midst of a dispute to seek legal advice. The best way to protect yourself and your business from any fallout is to speak with an experienced and specialist legal professional in advance of any dispute arising or, if one has already arisen, at as early a stage as possible.

Indeed, while it may be the last thing on your mind when embarking on a new business venture, planning for the worst early on will always put you in a better position further down the line. It may even help to strengthen and cement your business relationships from the outset.

Issues arising from a lack of trust can be challenging to overcome but, rest assured, there are steps you can and should take in order to prevent damaging repercussions from any such fallout, to protect your interests and to put yourself in a strong position from which to begin negotiating terms of resolution.

What is the dispute resolution process?

Andrew Marsden

Friends set up in business, or you’ve joined a business where you know the other directors well and, of course, it all seems great at first. Yet as time moves on, like in any relationship, things start to niggle away at you. Until one issue just seems irreconcilable.

It’s then that the rot can really set in and what was once a friendly relationship has truly broken down now.

And in my experience, it’s emotion that becomes the driving force, and that’s never a helpful place to start to try to resolve things moving forward.

Below is a guide designed to answer some of the questions you may have as to the dispute resolution process.

Explaining the dispute resolution process in a nutshell

For the majority, taking the first steps to dispute resolution can be the hardest part of the process.

I have spent many years working with clients navigating difficult shareholder or partnership disputes, and I know that, all too often, those involved delay taking or turn to the wrong people for advice and live to regret it.

Dispute resolution and the legal process can be confusing. It may well be the first time you have faced something of this sort. To help I have prepared an “infographic” which seeks to explain what’s involved. You can get a copy here.

Instructing a barrister directly

You might also be surprised to know that you can engage a barrister directly instead of going through a solicitor. What does this mean for you? Well, it can streamline the whole process, giving you immediate access to specialist expert advice and will often save you substantial costs!

And on that note, while you might imagine your glorious day in court taking your business partner down, trust me, you really don’t want to spend the time and emotional energy, let alone the cost. Because of this my objective is always to seek a resolution without going to court wherever that is possible.

What you can expect from Andrew Marsden

You may not be familiar with working with a barrister – it may even seem intimidating. That is why I have also prepared an outline of exactly what you can expect when working with me. You can obtain a copy here.

Establishing an effective working relationship

Every client I work with and the situation that they face is unique. But, what they all want is a practical and commercial solution that works for them. A collaborative working relationship is essential to achieving this. It is very much a two-way process. The service I provide must work for you. To achieve this, I welcome open dialogue, regular review and feedback. When you engage a barrister to resolve your shareholder or partnership dispute, it’s essential that you establish a good working relationship with clear lines of communication from the outset.

Cost savings and other benefits in going directly to a barrister

How much will it cost? Here complete transparency is key. There is no excuse for unexpected fees or hidden costs. It is imperative to be clear, open and straightforward. I agree all fees in advance so that there are no surprise charges, and I bill regularly so you know where you are. Indeed, if your lawyer is unclear about the costs involved, this should be a “red flag”.

Unknown to many, it is very often cheaper to engage a barrister directly rather than going through a solicitor. Solicitor firms generally face large overheads, and those inevitably get passed down to you, the client.

There are also other savings to consider. Going directly to a barrister can avoid significant delays. It reduces the chain of communication. Fundamentally, if you have a strong position, you will know this quickly and can act accordingly. On the other hand, if your position is weak you can save yourself a great deal of time, trouble and money.

Engaging a specialist barrister from the very outset not only provides you with direct access to specialist advice but also ensures you avoid steps that might compromise the strength of your position further down the line. I will provide you with a clear “road map to resolution” on the best commercial terms possible.

Free 30 minute consultation

So how do you start the process to resolution?

I offer a free 30-minute phone consultation. You will probably have a host of questions and I should be able to answer many of them for you immediately. So, if you’re facing a breakdown in your business relations, if you’re embroiled in a shareholder or partnership dispute or if your fellow directors/shareholders or partners are behaving in an unfair or prejudicial way, please get in touch – an initial conversation won’t cost you anything so you’ve nothing to lose!

I feel sick – my business partner is stealing from me!

Andrew Marsden

You look at the bank online – someone in the business is syphoning off money from the business account.

You then work out that it’s one of your once-trusted business partners.

That feeling of betrayal is truly palpable.

For any director of a company, that will be a hard pill to swallow. It can be both hurtful and demoralising to think that your working relationship isn’t as strong as it once was. Of course, it’s not only the shareholder relationship that will suffer; your business could be impacted quite significantly too.

The not-so-bad news is a route to resolution can generally be found even in the most strained of circumstances. The success of this resolution will largely come down to what steps you take in the wake of the fallout and who you engage to assist with it.

Dealing with a fallout

When you’ve had someone cheat on you behind your back – whether that’s in work or in a personal relationship – there are generally two ways to move forward.

The first is to get emotional and upset and try to make the wrongdoer “pay” or to try to get “even”.

The other is to think logically and practically, taking a far more considered and constructive approach. This will almost always result in a more favourable result in the long term.

It can be very easy in the first instance to let emotion take over and lead your actions. It’s understandable, particularly when someone close to you has breached your trust. However, it’s important that this doesn’t cloud your judgement or negatively impact on your chances of resolving the dispute on the best terms available so that everyone can walk away, perhaps not amicably but at least satisfied with the outcome.

What outcome are you looking for?

This is the key question to ask yourself when you are in the midst of a conflict with a fellow shareholder or partner. Getting “even” may be the tempting option, but is it really the goal here? Take time to sit down and reflect on what outcome would be best for you in this situation.

Do you want to buy out your fellow shareholder or partner from the business and have them cease to be a director?

Do you wish for yourself to be able to walk away from the business in exchange for a fair value for your shares?

Having a clear goal will help define your route to resolution and the best steps to take to achieve it. A specialist barrister should be able to talk you through the process and advise on what, realistically, is achievable.

In my experience, often the most straightforward, efficient and cost-effective way to resolve disputes is to have one shareholder leave the company receiving a fair price for their shares. That being said, it has to be done in the right way; simply excluding a shareholder or director from the business can be potentially damaging.

A barrister experienced in these disputes should be able to clearly lay out the options for you and to explain what is involved at every stage of the process. Ultimately, they should help to ensure you are in the best possible place to make an informed decision on what is right for your situation.

The path to resolution

  • Having the right paperwork in place – If you already have a shareholders’ agreement in place, this will likely include provisions that can be used to help reach resolution. For example, a shareholders’ agreement might contain terms that permit you to force a shareholder to sell their shares. Again, care needs to be taken in enforcing such provisions and a barrister with specialist experience can help you iron this detail out. If you don’t have a suitable shareholders’ agreement, then it is certainly worth putting one in place before any conflict or dispute arises. Even if you have no shareholders’ agreement in place, you will have articles of association, the terms of which might also assist in finding the appropriate way forward.
  • Access to specialist legal advice – Getting appropriate, experienced and specialist legal advice from a barrister early on about your rights is perhaps the best way to ensure that disputes don’t escalate and that the path to resolution is as straightforward and pain-free as it can be. It is generally preferable to resolve disputes by using negotiation strategies or through engaging in mediation where possible. Your barrister can assist with this; trying always to ensure that sensible compromises are achieved while keeping relationships as intact and as amicable as possible. Of course, if things can’t be resolved via mediation, litigation through the courts may have to be considered as a final resort. Rest assured that if this is the route you end up taking, the right barrister will provide support throughout the process and keep costs transparent so that you enter into proceedings well-prepared and confident.

For the majority, this will be the first time you will have faced a shareholder dispute within your business. If this is the case, you will no doubt have many questions and concerns as to what to expect from the process.

Please do get in touch if you would like some more information or would like to discuss your own specific circumstances. An initial thirty-minute consultation is free, and I’d be very happy to advise you as to the best steps to take.

Avoiding the pitfalls when in business with a partner, shareholder or director

Andrew Marsden

Starting a new business venture is an exciting time, yet like any relationship, the journey often presents challenges.

In my work as a specialist barrister dealing with shareholder/director and partnership disputes, I often see problems that, with just a little bit more planning and forethought, could have easily been avoided. 

The benefits of working in a bigger business are many. These benefits include sharing pressures and responsibilities, the opportunity to pool resources, and the chance to combine skills, experience and talent. 

Doing so can really raise the bar beyond that which might be achieved through a solo venture. But going into business with others certainly does come with its own set of challenges.

While many relationships are born quickly from shared passions and enthusiasm for a business idea, far fewer are able to stand the test of time. I specialise in resolving disputes between those in business together who have fallen out for one reason or another. 

Very often, things aren’t helped by the fact that solid foundations have not been set to meet the challenges that working together can entail.

So, before you dive into a new business relationship, first make sure you’ve got the fundamentals in place.  Trade through a limited company or, perhaps, a limited liability partnership. 

Ensure you have suitable articles of association and a sensible shareholders’ or members’ agreement. 

Make sure your understanding of the respective rights of participation in management and conduct of the business is recorded and enshrined. 

Make provision for access to all books, records, accounts and other information that might be required. 

Agree on salary entitlements and dividend policies. Consider the merits of “good/bad leaver” provisions and “put/call” and “follow me” options. 

Formalise an effective and efficient process for dispute resolution. 

Strategise for exits and settle the basis and method of any future valuations of interests.

Moving forward, here are my “Top Practical Tips” which might help avoid disputes or at least enable you to resolve matters before things really start to turn sour.

  • Prepare a business plan, implement it and keep it under review: acting on an impulse may sound attractive; but it is a risky strategy. Plan everything, implement your plan and then keep your plan under review.
  • Agree on goals and expectations: This is key to establishing a strong foundation for your business relationship from day one. Take time to consider your shared goals, aspirations and expectations and make sure you have these set out in writing.
  • Put boundaries and ground rules in place: When bad habits form, precedents are often set. It can be really difficult to re-trace your footsteps and unpick things you’re unhappy with. Set boundaries and ground rules from the start so that everyone is clear on expected conduct and working relationships; disputes often arise when uncertain boundaries are overstepped.
  • Consider and play to each other’s strengths and weaknesses: If you’re forming a business relationship with another person the chances are you are both bringing different things to the table. Consider these strengths and weaknesses and build your business plan around them. A mutual respect for each other’s varied talents allows less chance of friction, competition and resentment.
  • Remain honest and transparent: Most disputes involve one person doing something behind another’s back. It may involve taking money from the business account, the diversion of a business opportunity or simply the making of business decisions without reference to relevant and interested parties. If you remain honest and transparent throughout it will limit the risk of conflict.
  • Keep communication open: As communication breaks down, things are likely to go downhill very quickly. Even if your conflict has already escalated and you are no longer talking, legal professionals can act as advisers or even mediators to help re-open communication channels and enable sensible negotiations to be resumed and resolution to be achieved.
  • Keep personal and business relations separate: This doesn’t mean that you shouldn’t go into business with a friend, family member or partner – many very successful business relationships are forged in this way. But be careful about how you balance your personal and business relationships and keep clear boundaries in place. Your working relationship should be grounded in business and treated as such.

For further advice as to how to structure a business relationship, how to resolve a business dispute or more practical tips, feel free to get in touch with me for an initial, confidential 30-minute chat. It’s entirely free – there’s no obligation and no charge!

What started with such promise has now reached rock bottom.

Andrew Marsden

Unfortunately, this is a familiar tale, and it’s often a deeply distressing and challenging time for all involved.

Inevitably it will impact upon your business and its clients and customers and can have a devastating impact on staff and their moral.

When the trust is gone, and an acrimonious atmosphere pervades, it’s hard to keep emotions contained.

Reconciliation may not be easy (you might not even consider it a possibility), but the longer disputes are left unresolved the more likely it is that your staff will notice that something’s not right. Indeed, friction might be so evident that your clients and customers soon start to notice too.

No matter the cause, disputes are never good for business and it’s important you try and resolve yours as quickly, amicably and as cost-effectively as possible.

The first thing you should consider doing, before anything else, is getting some legal advice from someone who understands the litigation and other dispute resolution processes available and can provide support and guidance on the best way to achieve resolution. 

‘Commercial divorce’ can be complex, so it’s important you have someone helping you who is a specialist in the field with experience in such matters and knowledge of the different routes to resolution that are available to you. Having the right legal support in place from the start can make all the difference to the outcome you achieve.

The good news is it is now possible to engage a specialist barrister directly and without the need to have to pay for a solicitor as well. Engage an experienced and specialist barrister in this way and you may well find that the process can become surprisingly fast and cost-effective. You’ll also benefit from the continuity of having a barrister at hand to advise throughout the litigation and dispute resolution process.

Once you have engaged a barrister, they will be able to discuss your options going forward with you and check what provisions you already have in place, whether in the form of a shareholders’ agreement or articles of association. These constitutional documents should generally include dispute resolution mechanisms that can make the process much more straightforward. If you don’t already have any such provisions in place, your barrister can also help you with this.

Where reconciliation isn’t possible, and you decide to part ways, your barrister can assist in opening the lines of communication between all parties so that you can move forward towards resolution.

Will you need to go to court?

This is one of the most common questions I get asked by clients who have found themselves in the midst of a dispute.

As a specialist barrister with more than thirty years of experience dealing with shareholder and partnership disputes, my approach is always to try and achieve commercial resolution on the best possible terms, at the lowest possible cost, and, if at all possible, without having to go to court.

For the majority of cases, this means that the expense of litigation can be avoided. In fact, very often, resolution can be achieved in the early stages, sometimes through mediation, and even if the dispute is bitter and acrimonious.

If you find yourself in the midst of a shareholder or partnership dispute and would like some help and advice on the best options for moving forward to resolution, please do get in touch with me. An initial thirty-minute chat is completely free, and I’d be very happy to give you some guidance as to the next best steps to take.

Christmas – a time to reflect on your relationship

Andrew Marsden

Christmas gives us time to reflect. 

If your business relationship is going well, you might treat yourself to an extra mince pie. But if things are not going so well, you might find yourself asking questions like: ‘What am I doing this all for? Is it worth it? Is it time for change?”

Differences in opinion between those in business together are bound to happen. Clashes of personality occur. One person may become overly self-motivated or greedy. You may feel a degree of exclusion. There may even be dishonesty involved. Whatever the reason, rifts are inevitably going to be felt every now and again. Nine times out of ten, arguments will get resolved quickly. Both parties forget and move on. In other cases, reconciliation may not be so easy. 

Sometimes, relationships are strained to the point that they become irreparable.  If this is the situation you find yourself in don’t act impulsively or reactively. Take the time to consider the best course for you. Identify the measures that you need to take to protect the business and your interests in it. If you fail to do so you may find your dispute drags on, the business suffers and all you do is incur costs without making any real progress in finding a way forward out of the situation you find yourself in. On the other hand, with the right advice, planning and assistance in the implementation of that plan you might well find that the situation is resolved quickly, efficiently and cost-effectively.

Do: Enlist the best legal advice you can get as soon as you can. ‘Commercial divorce’ is complex and it’s important you are guided by an experienced specialist. You need a person who really knows the “in’s” and “out’s” in this area. You want advice from someone who not only fully understands the law and the litigation process but is also a master of all the other tools available to help resolve the position. All too often people delay seeking advice or turn to the wrong people and this can really backfire further down the line. The best course may well be to engage a specialist barrister from the start. You can now do this directly, going straight to a barrister and cutting out the “middleman”. This can ensure continuity throughout the process and it is surprisingly cost-effective too.

Don’t: Panic or let emotion get the better of you. If you’ve been personally impacted by a business relationship fall-out there are likely to be a lot of emotions involved. In the heat of the moment it can be difficult to determine between what feels right for you right now and what’s right for the business and for you and your interests in the longer term. Try to resist knee-jerk reactions. Approach the matter as calmly and as pragmatically as possible. 

Do: Check what provisions you have in place in any constitutional documents. They might offer a route to resolution. You are likely to have such agreements between you whether in the form of a shareholders’ agreement, articles of association or a partnership agreement. If properly prepared those documents should define responsibilities, assist in the smooth running of the business and include appropriate dispute resolution mechanisms. If not speak to your barrister and get them in place now before tensions rise and resolving issues becomes much more difficult.

Don’t: Assume you’ll need to go to court. Most disputes can be resolved without the need to issue any legal proceedings at all. Litigation really is the last resort. It can be costly and drawn out. Most “commercial divorces” can be settled out of court through negotiation; often via mediation. Even if your business relationship seems beyond repair, an experienced and specialist barrister can help to re-open those communication channels.

Do: Ask questions throughout. Most people who require legal help won’t have been involved in the process before. It’s completely understandable that you should have questions and concerns. Raise them all at any stage, and your barrister should be able to explain matters to you and bring you both clarity and confidence. Take a look at the infographic that I have prepared – see below:

which explains and simplifies the whole process: . Make sure you have complete faith in the person advising you and avoid finding yourself in a position you would rather not be in. 

Don’t: Be afraid to ask about costs. There is no reason why unexpected fees or hidden costs should arise. Choose a barrister who is transparent and upfront about costs from the outset. Engaging a barrister directly is often the most cost-effective way of obtaining a resolution and a way forward in what can feel like an intractable situation. Consider using the Bar Council’s Direct Public Access scheme to take advice directly from a specialist barrister from the outset. You might also even find it is more affordable than you anticipated it might be!

If you are in the midst of a shareholder or partnership dispute and would like some guidance on how best to resolve it, feel free to get in touch with me for a confidential no-fee initial 30-minute consultation.

Is GPT-4 cleverer than a barrister?

Andrew Marsden

This news just in: GPT-4 wins chatbot lawyer contest!

Perhaps it’s time for barristers to hang up their wigs and let artificial intelligence (AI) take over?

But hold on; GPT-4 may have beaten all other chatbots – it scored 75% in the bar exams and out-performed all other artificial intelligence models at legal reasoning – but read the small print, and you’ll see it’s still no match for real barristers according to ‘New Scientist’.

Let’s face it, if you’re in the middle of a complex dispute with another shareholder, partner or director, would you rather speak to a chatbot or an experienced and specialist barrister?

Having spent over thirty years working with clients that are embroiled in often complex and heated shareholder disputes, I can say with absolute confidence that artificial intelligence is no match for the understanding, sensitivity, knowledge and experience needed to help navigate, mediate and resolve disputes of this nature successfully.

Here are just a few of the reasons why talking to a specialist barrister with decades of experience in this field will give you the best possible chance of resolving your dispute successfully and economically:

Shareholder disputes are complex

Shareholder disputes are often particularly complex. There are often multiple parties involved, years of history to consider and changing responsibilities, roles and relationships that need to be carefully understood. The terms and effects of relevant shareholders’ agreements and articles of association need to be understood, and where there is no shareholders’ agreement in place, things can be even more complicated. Without experienced specialist expertise, shareholders are far less likely to be able to resolve their dispute amicably and walk away with a result that they can feel satisfied with.

Shareholder disputes are often sensitive.

When business relationships turn sour, there are generally a lot of human emotions at play. It is not unusual for shareholders to seek legal advice fuelled by feelings of anger, hurt, betrayal and animosity. Dealing with a real human is invaluable at this stage, particularly one that carries decades of experience in this tricky field; barristers are able to provide reassurance, level-headedness and clarity to clients in a way that artificial intelligence simply can’t. The client/barrister relationship is key.

Effective resolution of shareholder disputes can take time. It’s a process. You are likely to find that you need your barrister’s support during that process, and that support will only be effective if it is built on solid foundations. You will need to establish a relationship with your barrister based on trust, respect and understanding. A chatbot simply can’t provide that support. Nothing beats expert advice. 

Taking specialist and experienced legal advice at as early a stage as possible provides the best route to resolution in as seamless and stress-free way as is possible. Chatbots are simply incomparable to specialist barristers with years of experience in dealing with complex situations such as yours. An experienced, specialist barrister should be able to identify the best steps to take towards resolution. From pre-litigation to mediation and negotiation and right through to court proceedings, a specialist barrister will be able to advise, guide, represent and support you.

If you find yourself in the midst of a shareholder dispute and would like to talk to a specialist barrister with over thirty years of experience, please do get in touch by calling me on 07718 883094 or emailing andrew.marsden@commercialchambers.org. A thirty-minute initial conversation won’t cost you anything -I’d be very happy to offer you some advice and guidance.

Do you trust your business partner?

Andrew Marsden

If there’s one thing that sits at the centre of your business relationship it’s trust.

Whether you’ve just started a new venture with a friend or colleague or have been in business for years, trust will be at the core of your relationship; it is very much the glue that brings and holds that relationship and the business together.

So, if trust in a business relationship suddenly disappears or gradually breaks down, the impact can be far-reaching. For most, it will be both demoralising and upsetting and for many, it can be really devastating; especially when your business and its finances are compromised as a result.

Consider potential fallouts before a dispute arises

Before you face such a situation, there are things you can and should do to make life easier if the worst comes to the worst. Preparing for any future dispute does not represent a lack of confidence; is not the same as believing that your relationship will not last. Planning for any possible eventuality is prudent. No matter how long you have known your partner and how strong your business relationship is, disputes can and do arise sadly all too often. When they do, you want to be sure you have a strong and sensible shareholders’ agreement in place. A carefully prepared shareholders’  agreement should not only protect you from the consequences of a fallout but also provide the practical means for achieving resolution of any future disagreements or disputes.

Record your understanding and expectations in a written shareholders’ agreement

The best way to avoid disagreements over who is responsible for what or how your business should be conducted is to clearly set out right from the start what you have agreed, what are all parties’ expectations and the resolution processes to be adopted if differences of opinion or dispute should arise. Don’t just agree on these matters verbally but record them in clear written form and in a legally binding document so that everyone concerned knows the position from the outset and everyone has a written record that they can refer to when the need arises. A shareholders’ agreement is not a legal requirement but one prepared by an expert with real experience in this field will certainly make things much simpler, clearer and more straightforward if you should face disagreement or dispute in due course. Indeed, an effective shareholders’ agreement should provide the framework for resolution. It is relatively inexpensive and can save you a lot of money further down the line.

Consider mediation

If you already find yourself in dispute with your fellow director or shareholder then don’t immediately turn to litigation. Although when in the midst of a dispute it can be hard to see a way out, the chances are your dispute can be resolved without having to go to court. Mediation is a really effective way of achieving dispute resolution and, again, is best conducted by an experienced and trained professional.

Seek legal advice as early as possible

I offer an initial FREE thirty-minute consultation, so you don’t have to wait until you are in the midst of a dispute to seek legal advice; in fact, the best way to protect yourself and your business from any fallout is to speak with an experienced and specialist legal professional in advance of any dispute arising or, if one has already arisen, at as early a stage as possible. 

Indeed, while it may be the last thing on your mind when embarking on a new business venture, planning for the worst early on will always put you in a better position further down the line. It may even help to strengthen and cement your business relationships from the outset.

Issues arising from a lack of trust can be challenging to overcome but rest assured there are steps you can and should take in order to prevent damaging repercussions from any such fallout, to protect your interests and to put yourself in a strong position from which to begin negotiating terms of resolution.