Disputes within partnerships do unfortunately happen. When they do, they are hugely disruptive to the business.
It is important to take early advice from a dispute resolution lawyer and prompt steps in any partnership dispute to avoid (or at least minimise) the loss of management time and disruption to the business as well as the stress and legal costs.
Early recourse to a method of alternative dispute resolution, such as mediation or expert determination, may result in a swift, fair and cost-effective resolution to the dispute. Our dispute resolution solicitors are experienced in dealing with partnership disputes by way of court proceedings, arbitration and negotiating sensible and cost-effective resolutions by alternative dispute resolution methods.
What are typical partnership disputes?
Common scenarios giving rise to partnership disputes are:
- Disagreements around the strategic direction of the partnership
- Allegations that a partner has taken ‘secret profits’
- Allegations that a partner is not performing satisfactorily or is not pulling their weight
- Absence of a partner from a partnership or retirement of a partner from a partnership
The partnership agreement
The first port of call when a partnership dispute arises is to consult the written Partnership Agreement. This will set out the rights and obligations of the partners, the procedure for dealing with retirement and/or absence from the partnership and the procedure for the expulsion of a partner. The Partnership Agreement may also contain a dispute resolution clause setting the method by which the parties have agreed to try to resolve any dispute.
If there is no written Partnership Agreement, the partnership will be governed by the Partnership Act 1890.
Arbitration
The written Partnership Agreement may provide that any dispute is to be referred to arbitration. If this is the case, the Partnership Agreement is also likely to set out how the arbitrator is to be selected and appointed. An arbitrator’s decision at the end of the process will be final and binding.
Arbitration is generally regarded as being faster, cheaper, and more flexible than court proceedings. That said, the parties do still need to go through the various steps generally involved in the litigation process such as statements of case, a preliminary hearing, disclosure, witness statements, experts’ reports, and a final hearing.
While arbitration can still take some time, the parties do have more flexibility in terms of determining the speed at which the dispute proceeds (outside the restrictions of the court system).
There are no court fees, but the parties do pay the fees of the arbitrator(s).
In addition, arbitration is a private process and generally has the benefit of confidentiality.
Disputes within partnerships do unfortunately happen. When they do, they are hugely disruptive to the business.
It is important to take early advice from a dispute resolution lawyer and prompt steps in any partnership dispute to avoid (or at least minimise) the loss of management time and disruption to the business as well as the stress and legal costs.
Early recourse to a method of alternative dispute resolution, such as mediation or expert determination, may result in a swift, fair and cost-effective resolution to the dispute. Our dispute resolution solicitors are experienced in dealing with partnership disputes by way of court proceedings, arbitration and negotiating sensible and cost-effective resolutions by alternative dispute resolution methods.
What are typical partnership disputes?
Common scenarios giving rise to partnership disputes are:
- Disagreements around the strategic direction of the partnership
- Allegations that a partner has taken ‘secret profits’
- Allegations that a partner is not performing satisfactorily or is not pulling their weight
- Absence of a partner from a partnership or retirement of a partner from a partnership
The partnership agreement
The first port of call when a partnership dispute arises is to consult the written Partnership Agreement. This will set out the rights and obligations of the partners, the procedure for dealing with retirement and/or absence from the partnership and the procedure for the expulsion of a partner. The Partnership Agreement may also contain a dispute resolution clause setting the method by which the parties have agreed to try to resolve any dispute.
If there is no written Partnership Agreement, the partnership will be governed by the Partnership Act 1890.
Arbitration
The written Partnership Agreement may provide that any dispute is to be referred to arbitration. If this is the case, the Partnership Agreement is also likely to set out how the arbitrator is to be selected and appointed. An arbitrator’s decision at the end of the process will be final and binding.
Arbitration is generally regarded as being faster, cheaper, and more flexible than court proceedings. That said, the parties do still need to go through the various steps generally involved in the litigation process such as statements of case, a preliminary hearing, disclosure, witness statements, experts’ reports, and a final hearing.
While arbitration can still take some time, the parties do have more flexibility in terms of determining the speed at which the dispute proceeds (outside the restrictions of the court system).
There are no court fees, but the parties do pay the fees of the arbitrator(s).
In addition, arbitration is a private process and generally has the benefit of confidentiality.
