A fight to the death?

We deal with disputes

We deal with disputes -- between married and unmarried couples, brother and brother, parent and child, landlord and tenant, supplier and customer, landowner and neighbour, seller and buyer. Often the bitterest arguments are between business partners, whether they operated within a limited company or under a partnership agreement

This may be because the parties set out with such high hopes, overcame such difficulties in the early days and came to trust each other so much that any falling out is seen as a betrayal

Even if there is no specific incident giving rise to this "betrayal", people and their circumstances change over the years. All sorts of things can lead to problems between the business partners

• Differences about the direction of the business

• One partner wishing to slow down, even becoming non-executive

• He may wish to get out all together, cashing up his shares or realising his partnership capital/goodwill

• The other partner might perceive that he is becoming lazy (whether that is true, is irrelevant)

• Divorce might create a need to raise capital

• Long-term illness may mean that one partner is being "carried"

• Financial problems may lead to a reluctance to plough money back into the business

• A driving ban may destroy one partner's effectiveness

Why is it then that we so often find that these eventualities -- which are so easily foreseeable -- are not catered for in the business documentation, if any?

The answer is, of course, that we tend to open litigation files in respect of businesses where the partners did not, at the very beginning, sit down together in an atmosphere of goodwill and say to each other "what if......................?"

Such an exercise would not have been very expensive -- certainly not as expensive as conducting the arguments through solicitors and accountants later on

It does not happen because of the attitude "it will never happen to us". In our experience, the quickest time between the business partners saying that they had known each other for 25 years (having been through school together and did not need a written shareholders agreement for their limited company) and issue of court proceedings was 18 months

Much pride is often at stake. Neither party wishes to be seen as giving in. Compromise tends to come late in the day, often after both parties have spent serious money on legal fees and are looking at spending a lot more if the argument continues

The old adage "a stitch in time saves nine" under estimates the ratio between the costs of getting a proper agreement sorted now and the likely legal costs in having an argument later

By all means, go into business with someone you trust -- after all, you would not go into business someone untrustworthy -- but it is a racing certainty that something will crop up during your business life together, so try and cater for it in advance

We are able to offer fixed fee meetings to discuss the above and a host of other legal matters. We can see you at our Kent office, London Docklands consulting rooms or elsewhere in Central London by arrangement.

Call Michael Breeze on 07900 195 195 or call 0845 270 2511 to set up an appointment