MEDIATION AS A TOOL FOR EARLY RESOLUTION OF FINANCIAL DISPUTES
Since the COVID-19 outbreak caused lockdown to hit in March 2020, the UK financial services industry has been experiencing unprecedented conditions that will push some funders to the edge of extinction. Their customers have struggled with both national and local lockdown protocols, and an unprecedented lack of demand both for commercial property and for services generally. Very few sectors have profited from this unique environment.
Most businesses may be able to cope with negative news, but what they struggle with is uncertainty, and the financial services industry fears uncertainty more than most. This concern regarding the current economic climate is statistically validated by headlines that confirm that after a record plunge of 20.4 percent, this is probably the UK’s worst recession to date.
As the country’s economic position continues to crumble at the hands of COVID-19, it is highly likely that the commercial sphere will see a surge in financial issues, for months or even years to come. The effects of this pandemic on our commercial profile as a country are snowballing, and financial liquidity will continue to be a problem for many organisations. This is why it is important to consider different, more cost-effective ways to handle any financial disputes that may arise throughout this economic uncertainty.
All of the above will lead to disputes. In times such as these, people will scrutinise contracts for forms of redress. Margins will become ever tighter. We have seen across several commercial and financial litigation cases the frequent referral to force majeure provisions. Clauses relating to the exclusion of liabilities and the indemnification of certain losses are ever more important.
Oct-Dec 2020 issue
Shakespeare Martineau LLP