Emotions – Do not let them affect sensible commercial judgment

By Philip Colman, Principal, MST Lawyers

As an experienced litigation and dispute resolution lawyer and mediator I often observe some, but not all, of the emotions of clients who are involved in commercial disputes.

Disputes can arise for all sorts of reasons. There may be misunderstandings, lack of rationality, sharp, unethical and dishonest practices and downright lying. Sometimes pride, relationship breakdowns and emotions can get in the way as well.

It is not uncommon for people in dispute to be angry about what someone else is doing or threatening to do and, very often, rightly so. They may feel they have been ripped off or, if they are on the receiving end of legal process, they may feel they have been sued without justification.

Sometimes we are told “I cannot allow this as a matter of principle!”. Decisions as to litigation or dispute resolution strategy are often made with the person’s rights and principles in mind. This is more common at earlier stages of a dispute or litigation where it may be believed that there is a need to be firm and aggressive. After all, there are occasions where the more aggressive party is able to get his or her way when faced with a timid party.

But emotions can often affect sensible commercial judgment. Sensible commercial judgment involves considering:

• The strengths and weaknesses or your position;
• How much it will cost to go to Court;
• The risk of an amount claimed being recoverable;
• The distraction of key personnel from the role they are supposed to play, through attending meetings with lawyers and giving evidence in Court; and
• The personal and relational stress than can be caused by an ongoing dispute.

There is no “one size fits all” approach to dispute resolution and litigation strategy. However the best strategies are generally devised when the emotion is taken out of the decision making process. For a person who is directly and financially involved in the dispute, this can be hard.

That is why it is sensible to get advice from a competent, commercially focussed lawyer; someone who will not necessarily agree with everything you say; someone who looks at the matter without the cloud of emotions; someone who can actually assess what you need going forward (as opposed to what your rights may be) and devise a plan to achieve those needs. Where appropriate, the lawyer will work with other professionals to ensure that a well-rounded strategy is devised and implemented.

Whilst it is the role of lawyers to assess facts, apply the law and give legal opinions, good lawyers who practice in commercial dispute resolution and litigation should also consider and provide advice aimed at achieving a client’s commercial objectives. 

They should not get angry because their client is angry. They should not send angry emails or letters to opposing parties or lawyers. They must stay level headed all the time so as to provide the client with clear independent commercial objectivity. 

Good lawyers who practice in commercial dispute resolution and litigation must challenge what they are told by clients or potential witnesses if they feel that the story does not make sense. They should put to their clients alternative scenarios and reality test the client’s belief in their case. They should not be “yes” men or women.

A lawyer who has these attributes and who is technically skilled will provide the best advice to a person involved in a dispute or litigation.

Of course, as lawyers, we generally must act in accordance with our instructions. But good lawyers, through the giving of sound technical and commercial advice, generally can persuade their clients to follow their advice. Sometimes that is not possible and that is when you see lawyers taking steps to cover themselves through written communications. At the end of the day, lawyers must respect and accept clients’ instructions, unless they involve doing illegal things, breaching the lawyer’s paramount duty to the Court or ethical rules or breaching any litigation obligations imposed by law (such as the overarching obligations in the Victorian Civil Procedure Act).

The clients who make the most money (or suffer the least loss) from a dispute or litigation are those who are prepared to look for commercial resolutions at an early stage where they are focusing on what they need, rather than what they believe they are entitled to. Regrettably, too many people involved in disputes say, after they have incurred tens or hundreds of thousands of dollars in costs, “I would have been better off if I had taken the offer made at the start”.

If the lawyer advising the client has his own pocket in mind, rather than that of the client, there is a high chance that the advice will be clouded, not commercially based and not in the best interests of the client.

My team at MST passionately remains focussed on the best interests of our client. We take the emotion out of the dispute and provide clear, frank and supportive advice and strategic options. My team is competent both technically and commercially and it is our goal to ensure for all of our clients that disputes are resolved efficiently, bearing in mind the objectives of our clients.

For further information, please contact our Dispute Resolution & Litigation team by email litigation@mst.com.au or by telephone +61 8540 0200.