What's involved in a dispute resolution process, what do you need and how long would it take?
Instead of going to court, what is the cost to do mediation or an alternative dispute resolution by hiring a lawyer?
Preparing for a mediation requires almost as much work as a hearing, however what I point out is the great advantage with mediation is that you still have control over the outcome, whereas in court it is completely up to the Judge. Mediation generally are for a day and it depends on the complexity of the dispute. I have undertaken a complex commercial mediation with a private mediator and it cost $30,000 but it settled on the day and if it had of continued to a hearing it would have cost around $150k.
I am interested to hear from small business owners what they do when they get into a dispute - this could be from anything from an issue with a supplier or customer or employee to internal disputes...
I guess it depends on the situation and context Nicole, but if it's an internal matter of opinion rather than fact, as the business owner yours is the final word.
If a dispute with an external entity, I would seek an independent ruling – arbitration – rather than lawyer as first port of call. Sometimes a fresh set of eyes can diffuse a situation and provide perspective.
If however, the dispute is over money owed, get the legal attack dogs onto it pronto!
What do you do with a client who after 90 days still hasn't settled a $209 invoice they keep saying they will?
I assume you have had enough contact with them that there is no doubt this amount is neither overlooked nor disputed. So it depends on the commercial value of the client to you:
1. This is the only invoice. Send a letter advising legal action if not paid within 7 days. They will either pay or not. If they don't, write the debt off and move on. Spending more time and money on a small, slow-paying client is just not worth it.
2. You have ongoing business for a reasonable amount with them. Send a letter / email advising that your policy is to do no further work for clients with bills 90+ days overdue so their account has been suspended. They need to pay within 7 days. All future work will require a deposit in advance / be on a 7 day payment term.
3. You have no business at present but hope for some in the future. Build it into the pricing for the future work and make sure the payment terms on that future work are cast-iron including an advance payment, and that they sign for the work before you start doing anything.
Including a clear statement of payment terms in your T&C is also a good idea.
BTW I once had a client who only ever paid on receipt of a 7 day warning letter. Non-payment was clearly a cashflow management issue for them and the 7 day letter acted as a warning to them that it was time to stop resisting and pay up. Once I knew the pattern I just made sure they got 7 day letters at 60 days when other clients didn't get them till 90 days.