Case Study: Service agreement dispute analysis

When our client, an accountancy firm in London with a strong reputation across the UK (our “Client”), found itself embroiled in a commercial contractual dispute with a corporate client, they sought our expertise. Through early assessment, we were able to not only resolve the dispute, but also protect our Client’s business interests.

Background

Our Client had entered into a service agreement to provide auditing and financial advisory services to their corporate client (the “Contract”). The Contract included deadlines and specific deliverables. However, midway through the Contract, the corporate client began delaying payment of invoices and disputing the scope of work, alleging that our Client had failed to meet the agreed service standards.

The corporate client’s actions put our Client’s cash flow at risk. Further and more concerningly for our Client, there was significant reputational risk, as the allegations of non-performance had the potential of damaging our Client’s standing in the competitive market.

Early Case Analysis

We carefully assessed our Client’s position, including:

1. Review of the contract and other documents;

2. Evaluate the non-performance allegations: collaborating with our Client we considered the performance obligations in the agreement, our client’s adherence to contract terms, and gathered evidence to support their position;

3. Risk analysis and mitigation we analysed the financial implications of the dispute, calculating the potential damages and losses; and the risks associated with litigation, including reputation damage, and developed strategies to mitigate these risks.

Strategy and Resolution

Having considered all the above aspects with our client, we engaged with the solicitors for the corporate client in negotiations. We were able to present documentary evidence of our Client’s compliance with the contractual terms and highlighted the financial and reputational risks that the corporate client could face if the dispute would escalate to litigation. Simultaneously, we presented a draft claim form and particulars of claim, signalling our Client’s intentions to issue proceedings if necessary.

This approach led to a swift and favourable outcome. The corporate client agreed to honour the Contract and eventually made full payment of all outstanding fees and continued with ongoing compliance with the original terms of the Contract.

Why Our Approach Was Successful

Our extensive experience in handling commercial contract disputes within the professional services sector was crucial in achieving this outcome. Our strategic assessment allowed our client to turn a potentially damaging situation into a victory.

By leveraging our firm’s expertise and early assessment and strategy, our client’s financial interests and reputation were protected, ensuring their continued success in a competitive industry.