Financial Dispute Resolution

How is financial dispute resolution different?

Disputes over personal financial matters often arise and require the assistance of professionals to resolve the matter. It is often appropriate to engage solicitors to assist with these matters. However, sometimes the disputes do not necessarily relate to legal issues or the resolution process focuses on who’s right and wrong and ignores the “big picture” factors. The stress, time away from your business or job, and legal costs can outweigh the potential benefits of winning. In other cases, even if you do win the unsuccessful party may not have the ability to pay.

We assist people to resolve disputes with a commercially-minded approach. Often disputes focus closely on the issue that has arisen, but ignore other factors affecting the parties such as time and financial commitments, and the impact of the dispute on the final outcome. As a result, these commitments can cause ongoing stress, a loss of focus on their business leading to decreased performance and financial costs that may outweigh the benefit of winning.

With our experience assisting people in financial difficulty and resolving financial disputes, Cactus Consulting assists people to resolve financial disputes they’re involved in, or mediate between parties to find acceptable solutions they can agree on.

What types of personal disputes can financial dispute resolution help solve?

Types of engagements where we assist to resolve disputes commonly include:

  • Partnership disputes
  • Settling legal claims and litigation
  • Property ownership disputes
  • Settling Bankruptcy Trustees’ claims in relation to property disputes
  • Family business disputes
  • Marital separation or family law proceedings which impact on the structure and performance of a business

Looking at these more closely:

Partnership disputes

Disputes among business partners arise for various reasons. Concerns about the financial status of the business, lack of commitment from one party, changes in personal circumstances, family and marital breakdowns or just general disagreements about the direction of the business.

A departing partner will be concerned about liability for guarantees and payment of tax and superannuation accrued while a partner. They will also want to be repaid their investment and sell their partnership interest, raising disputes over value and the other partners’ ability to pay them out.

Negotiating between parties on a commercial basis puts the emphasis of resolving a departure on commercial grounds, while providing sufficient protection for partners from potential legal action or insolvency.

Settling legal claims and litigation

Litigation can start out with the optimistic expectations, people and businesses can be forcibly dragged into it or it can be just to prove a principle. But cases that start out strong can unexpectedly become problematic, and reasonable expectations of a favourable settlement being agreed can turn to frustration. Disputes are expensive with fees to reach trial often estimated at upwards of $250,000 for each party. Lawyers, barristers, expert reports and court fees all add up. And none of this takes into account the significant emotional and time costs for the people involved, causing stress on their families and impacting their jobs or businesses they run.

For people involved in litigation:

  • losing a court case may mean an inability to pay, resulting in insolvency and  personal bankruptcy
  • even for a litigant expecting to win, they may not be able to afford the costs to proceed to trial, or the other (losing) party may not be able to afford to pay a successful judgement.  Suddenly a winning case can become a lose:lose case.

At the point where continuing litigation may not be the preferred outcome, there’s an opportunity to look at the bigger picture and consider alternative courses of action.

Property ownership disputes

It can be necessary for multiple owners to form syndicates for property investment and development. Changes in people’s circumstances can necessitate departures from the syndicate, presenting challenges for the continuing viability of a project and exposing all parties to potential losses.

In these circumstances, innovative solutions are required to meet the financial needs and limitations of co-investors, financiers and other parties to maintain positive outcomes.

Settling Bankruptcy Trustees’ claims in relation to property disputes

When someone is facing bankruptcy, there can often be a tendency to seek to transfer property or hide assets. Bankruptcy Trustees have extensive powers to obtain information and documentation and investigate a bankrupt’s affairs and pursue claims.

But there are also valid defences to Bankruptcy Trustees’ claims under family law and equitable principles including the doctrine of exoneration. Given the source of these equitable principles being in historical case law, many people who find themselves in these situations are unaware of the potential defences available to them. In addition to some strong legal defences available, there are also commercial outcomes that may be negotiated to either settle claims.

Family business disputes

It’s very easy for small family disagreements to become huge rifts destabilising businesses with high profile cases often hitting the media. The close personal relationships can cause commercial realities to be ignored in the pursuit of personal agendas which can leave the parties with nothing left at the end.

To avoid tearing a family and its wealth apart, pragmatic commercially beneficial and carefully considered outcomes can be negotiated.

Marital separation or family law proceedings which impact on the structure and performance of a business

When a husband and wife with joint business interests separate, things can go one of two ways. We prefer the path that involves delicate handling, careful separation of interests and unwinding of a business from a relationship to preserve its viability. The other option leaves the people involved wishing they took the this path.

We understand the complexities of marital disputes and that each party deserves their wishes to be respected. However, experience has shown that while the emotional impact will fade away, the financial impact of an antagonistic dispute may not. Family businesses can be closed and liquidated and both parties can be left bankrupt – outcomes that impact families and make no one a winner.

Need help to resolve your dispute?

With our experience assisting people in financial difficulty and resolving financial disputes, Cactus Consulting can assist you to resolve financial disputes you may be involved in, or mediate between parties to find acceptable solutions you can agree on.

To understand whether financial dispute resolution may assist your situation, get in touch with us for a free confidential discussion.