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Commercial Dispute Resolution: Methods and Funding

Commercial dispute resolution typically involves resolving a business-related legal disagreement. An agreement may be accomplished through legal discussions, court proceedings, or alternative dispute resolution (ADR).

For commercial disputes in the UK and abroad, companies may opt to turn to alternative dispute resolution in an attempt to reach a quicker conclusion and to maintain company relationships. This route is often chosen rather than pursuing potentially expensive litigation through the court system.

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If you are involved in any type of commercial dispute, Annecto Legal can put you in touch with the right legal experts to help you decide upon the best course of action, as well as assisting with the funding of your case. Unfortunately, because of the high costs of legal actions in the UK, we only assist in disputes which are valued at over £250,000, at the absolute minimum. We would like to be able to help on other claims, but we just don’t have access to any products that can assist on smaller matters.

If you have a dispute for the small claims court, you may wish to check out the following government website: or contact Citizens Advice at

What is commercial dispute resolution?

Commercial dispute resolution may include negotiation between parties, court litigation and alternative dispute resolution (ADR).

ADR for commercial disputes refers to the method of resolving disputes between conflicting parties outside of the court system. These methods help parties work together to reach a mutual solution to their disagreement. This approach covers several methods, such as arbitration, mediation, conciliation, and negotiation.

In many ADR methods, a qualified professional will typically guide the parties, either together or separately. This is done to establish common ground and determine a viable path forward. Unlike litigation, where one party is usually subject to an unfavourable ruling, it can often be the case that all involved parties agree upon the solution.

Methods of commercial alternative dispute resolution

ADR can often assist parties in finding a solution without needing to resort to litigation. There are several alternative dispute resolution methods available, including the following:

Mediation – This method typically involves meeting with a trained mediator who will assist the parties. They can help them to understand each other’s point of view to encourage them to reach a mutual agreement. Whilst this is done through mediation meetings, it is typically much less time consuming than litigation.

The mediator is neutral and will not make any decisions, instead helping the parties to find a beneficial outcome.

ArbitrationArbitration is similar to mediation in that it also involves an impartial adjudicator. However, an arbitrator will make a decision based on the facts that are presented to them. This decision is generally legally binding.

Arbitration is usually more cost effective than litigation. This is because an arbitrator has the ability to award a more flexible solution than the Courts.

Conciliation – The method of conciliation is similar to mediation; although, it is not typically dealt with face-to-face. This method can be used by parties to attempt to resolve and issue quickly before their positions become entrenched.

Litigation – If a commercial dispute cannot be resolved through alternative dispute resolution methods, it will then be put forward to the High Court. Commercial litigation can be more expensive and time consuming than alternative dispute resolution methods.

The court will make an order based on a hearing of the facts regarding the case. This will be legally binding on the parties.

What are the benefits of alternative dispute resolution?

Opting for negotiation and alternative dispute resolution is typically a faster and less expensive approach to resolving a legal dispute compared to litigation. It helps to free up the parties’ time to concentrate on their business instead of a protracted and harmful legal battle.

Moreover, these alternative dispute resolution methods present an opportunity for the parties to mend their relationship.  In some cases, these methods can even potentially renew their business partnership for their shared gain.

The use of some alternative dispute resolution methods, such as mediation, can be advantageous as all involved parties agree on the outcome. This ensures that no unwanted results are imposed on anyone, resulting in a win-win scenario for both parties.

Commercial dispute resolution funding

Legal Expenses Insurance/ ATE: Commercial legal expenses insurance (LEI) exists to aid businesses in obtaining advice for disputes involving commercial matters. It can also assist with any unexpected legal costs involved if they find themselves in a dispute or wish to bring a claim themselves. Most business legal expenses insurance is taken out as after the event insurance (ATE insurance).

Commercial LEI can be used for both litigation and alternative dispute resolution methods.

Commercial ATE insurance can provide indemnity for a wide range of legal disputes. This includes commercial contract disputes, intellectual property disputes, employment disputes, professional negligence, partnership disputes and many more.

Third party fundingThird party funding (TPF) is a funding agreement in which an independent funder with no prior connection to the dispute agrees to finance all or a part of the legal costs of the commercial dispute in return for a fee payable from the awards.

With the help of third party funding, you can avoid taking any financial risks as the funder pays for everything in return for a share of the damages. If the case fails, the funder bears all the costs and you pay nothing.

In return for taking the risk, the funder will typically seek in the region of a fifth to a third of any damages recovered. This type of agreement means you keep up to 80% of the reward, having taken none of the risk. In larger cases the costs might be such that you actually keep well over 90% of the returns. Third party funding can also be used alongside other available funding arrangements, such as ATE insurance, conditional fee agreements and damages-based agreements.

Third party funding is a commonly used funding method in arbitration proceedings.

 Who can Annecto Legal assist?

Annecto Legal accesses over sixty providers of commercial dispute resolution funding. Our experts can help you get the best deal for your case. If necessary, we can also recommend specialists in the particular area of law that you need, as well as lawyers that bring knowledge of your sector.

Annecto Legal assists both large corporates and small businesses with commercial dispute resolution. We help to enable access to justice for our clients. This is alongside the transfer of financial risk away from businesses’ balance sheets through commercial LEI. We can also assist individuals with business disputes, as well as accountantsinsurance brokerssolicitors and insolvency practitioners.

How can Annecto Legal assist?


Annecto Legal helps clients realise the value of their commercial disputes. We work closely with litigation funders, insurers and law firms that seek alternatives to the traditional hourly rate funding model.

Alternative funding methods are available for alternative dispute resolution methods just as they are for commercial litigation. We also provide support in multi-national and multi-jurisdictional disputes.

Contact an expert member of our team today to find out more about commercial dispute resolution methods. Our experts can help to determine which commercial litigation cover is the correct litigation funding choice for you.

Call us today on 0800 612 6587.

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