Tag: shareholder dispute

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.

What happened to our trust?

Andrew Marsden

If there’s one thing that sits at the very epicentre 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 and good faith will be at the core of your relationship; it is what initially brings business relationships together and it is very much the glue that holds that relationship and the business together.

So, when the 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 but for many it can be really devastating; especially when your business, finances or both are compromised as a result.

Consider potential fallouts before a dispute arises

Before you have to 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 a future dispute is not the same as believing that your relationship will not last. Planning for any eventuality is prudent. No matter how long you have known your partner and how strong your business relationship is, disputes can and do happen. When they do, you want to be sure you have a strong and sensible shareholders’ agreement in place. That agreement should not only protect you from the consequences of fall out but also provide a practical means for achieving resolution.

Record your understanding and expectations in a written shareholders’ agreement

The best way to avoid any disagreements over who is responsible for what and how your business should be conducted is to set out your agreement, expectations and dispute resolution process right from the start. Instead of just agreeing this verbally, record it 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 it will most certainly make things much simpler, clearer and more straightforward if you should face disagreement or dispute in due course. Indeed, an effective shareholders’ agreement will provide the framework for resolution. It is also 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 is best conducted by an experienced and trained professional.

Seek legal advice as early as possible

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 fall out is to speak with a legal professional as early 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. If this is a situation you have found yourself in rest assured that there are steps you can and should take in order to prevent damaging repercussions from that fall out, to protect your interests and to put yourself in a strong position from which to begin negotiating terms of resolution.

I offer an initial free thirty-minute discussion during which I can advise you on the best way forward for you so to find out more please do just get in touch.

Legal Surgery to get you the help you need with partnership and director disputes

Andrew Marsden

Shareholder and partnership disputes are never easy but they would certainly be a whole lot easier if you had an experienced, specialist barrister on hand to guide you through the process and answer questions you have as and when they are arise!

In reality this doesn’t happen too often. People only seek out a barrister’s help once they are very much in the midst of a dispute and often when legal proceedings feel like the only way out.

However, with the right advice, support and guidance most shareholder and partnership disputes can be resolved without the need for litigation or ever needing to go to court.

Free Online Legal Surgery

If you could do with some expert legal advice in this field then come along to the free online legal surgery that I will be hosting on September 29th from 4pm-5pm. This is your chance to pick the brains of an experienced, specialist barrister without incurring any fees; an opportunity that doesn’t come around very often!

I’ll be discussing a range of topics such as:

What should I do if I have been excluded from my company and its business?

Being excluded from business decisions and proceedings is a very common issue which often leads to frustration, anger, hurt and resentment.

How do I ensure I get a fair share of the profits from our company?

Disputes regularly arise when people feel they are not getting their fair share of the spoils from the hard work that they have put in.

Can I get access to our company’s accounts, books and records?

In a world where information is often key ensuring you have access to your company’s accounts, books and records can be critical.

How do I go about removing a fellow director/shareholder who has acted wrongly?

If you feel you do have to get rid of your business partner it is essential that you should understand whether you can do so and how you should go about doing so; otherwise it can certainly land you in “hot water”!

How do I deal with a fellow director/shareholder who is moonlighting?

When someone tries to take joint business opportunities for themselves rather than sharing them you need to know how to respond to protect your interests.

If you would like to take part in my free legal surgery, just go to Eventbrite link below that’s best for you and register your space:

>>For the Solicitors Legal Surgery<<

>>For the Business Owners / Stakeholders<<