Managing legal disputes: A practical checklist

Legal disputes can be complex, time consuming, costly and require strategic management. Beyond the factual and legal contest, in-house practitioners must navigate staff-related issues, financial risks, regulatory requirements and reputational concerns.

This checklist covers critical early-stage considerations such as insurance and regulatory obligations, limitation periods, contractual obligations, confidentiality and privilege, as well as ongoing challenges including costs, evidence preparation and enforcement. Addressing these issues helps a party to minimise risks, improve efficiency and strengthen their position.

Notifying your insurer

When a company’s business identifies a potential or actual dispute, the internal legal team must promptly inform the responsible insurance manager and assess whether its insurance policy requires notifying the insurer of circumstances that may give rise to a claim.

Failure to notify the insurer in accordance with the policy terms can have serious consequences, in particular, denial of cover.

Disputes involving a contract

If the dispute involves a contract with another party, the legal team should review the "Notices" provision to ensure compliance when issuing or responding to contractual notices.

Generally, a "Notices" provision specifies the types of communications covered, the prescribed delivery methods, and relevant recipient details.

Likewise, the legal team should review any applicable "Dispute Resolution" provisions in the contract and outline the necessary steps for compliance. These provisions often require disputes to be escalated to each party’s Chief Executive Officer (or their delegate) before further action is taken.

Before invoking a "Dispute Resolution" provision, the legal team must assess whether doing so aligns with the company’s strategy. Key considerations include whether it supports commercial objectives, preserves legal rights, clarifies contractual ambiguities, or increases exposure to counterclaims.

The company should also keep in mind that during the management of a dispute under a contract, both parties are generally required to continue fulfilling their obligations, except in certain circumstances.

Third parties

It is also important to consider whether a claim can be made against any third parties. Failure to do so early on in a matter can lead to inefficiencies, higher costs, or separate litigation.

Jurisdiction

The legal team will also need to determine at the outset which court or tribunal has jurisdiction and what law governs the dispute. Where no contract exists, jurisdiction is determined by statutory provisions, common law, or the location of relevant parties and events.

Limitation periods

Statutory limitation periods impose strict deadlines for commencing proceedings, varying by claim type and jurisdiction (eg. six years for contract and tort claims). Failing to act within the limitation period can permanently bar a claim so you must identify and diarise deadlines early.

Regulatory obligations

When managing or resolving disputes, the company must ensure that it complies with all applicable regulatory requirements and other relevant governance obligations (eg. continuous disclosure under the Corporations Act 2001 (Cth)).

Public relations and reputational risk

Legal disputes can impact reputations, particularly companies involved in high-profile matters.

A clear media strategy is essential, balancing transparency with legal risks, including legal professional privilege (LPP) considerations. Communication with key stakeholders, such as investors and regulators, should be managed carefully.

Costs risks and budgeting

Assess potential legal fees, and expert expenses, court costs as well as the risk of adverse costs orders. If the matter becomes litigious, corporate defendants should consider seeking security for costs if the plaintiff may struggle to pay an adverse order.

Early budgeting and cost-benefit analysis inform strategic decisions, including potential settlement.

Enforcement strategy

A favourable judgment is only valuable if it can be enforced. Assess the counterparty’s solvency and asset position before litigation. Where asset dissipation is a risk, consider seeking freezing orders or other interim relief. If international enforcement is required, assess applicable treaties and foreign legal processes.

Confidentiality, privilege and internal communications

During the management and resolution of disputes, the legal team should take necessary steps to ensure that all involved:

• maintain confidentiality regarding the existence of the dispute and any related information;
• preserve LPP over privileged communications, including legal advice provided by internal and/or external legal advisers;
• exercise caution when exchanging internal written communications, as these may need to be disclosed in court unless protected by LPP; and
• avoid making statements that could be interpreted as an admission of the company's liability.

External communications

The company must exercise caution when communicating with the opposing party in a dispute. Accordingly, individuals involved should:

• keep detailed notes of all conversations and meetings with the opposing party;
• ensure that lawyers attend meetings if the opposing party intends to bring legal representation;
• refrain from engaging in discussions or meetings with a more senior representative of the opposing party without prior approval from their direct report and the relevant dispute manager in the legal team;
• avoid making “off the record” remarks, as they may provide the other party with a tactical advantage;
• ensure that any communications intended to be “without prejudice” are pre-approved in writing by the relevant dispute manager in the legal team;
• refrain from making any admissions without prior written approval from the relevant dispute manager in the legal team; and
• subject to the company's disclosure obligations, keep both the dispute itself and all related facts and circumstances strictly confidential.

Document preservation and witness management

All documents (eg. written materials, electronic records, audio and visual recordings, and diagrams) that may be relevant to current or reasonably anticipated legal proceedings must be preserved.

Accordingly, the relevant dispute manager in the legal team must ensure that all hard and soft copy documents potentially relevant to a dispute are identified and secured by:

• identifying each employee, consultant, or contractor involved in the matter;
• sending an email to the identified persons specifying the categories of documents or records falling within a prescribed period which must carefully be identified, and provided to the legal team, including:
  • repositories of soft copy material, including email accounts, servers, shared drives, cloud storage, local devices and back-up tapes; and
  • original hard copy documents in a folder or box (depending upon the volume of material); and
• co-ordinating with external lawyers regarding the proper storage and management of the secured materials.

In addition to preserving company records, steps must be taken early to secure witness cooperation. Employees have a duty to assist the company, and for consultants or contractors, the relevant dispute manager should review their contracts to determine the extent of their obligations.

To assist the company in making and maintaining claims for LPP, the relevant dispute manager should arrange a witness interview with external lawyers. In most cases, preparing an outline of the witness’s evidence will be sufficient. However, if an employee is leaving the company or a consultant’s or contractor’s term is ending, obtaining a signed statement before their departure may be preferable.

When interviewing a witness:

• ensure that a neutral business representative and/or a human resources representative is present to uphold the integrity of the process;
• put relevant documents to the witness and take detailed notes of their responses;
• after the meeting, the relevant dispute manager or external lawyer should draft an outline of evidence (or a formal statement) and provide it to the witness for review and comment; and
• after incorporating the witness's feedback, confirm their agreement with the final version.