Businesses shun litigation for conciliation in pandemic but legal claims likely to rise in 2021 – EY

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UK businesses have avoided using litigation to resolve commercial disputes during the COVID-19 pandemic, instead turning to negotiation and mediation, according to new research published today by EY.

The research suggests that UK companies have heeded official guidance, released by the Cabinet Office in May 2020, which called on corporates to steer clear of litigation throughout the pandemic.

Almost two-thirds (63%) of the more-than 100 FTSE350 and private companies surveyed by YouGov for EY said they had adopted a more conciliatory approach to business disputes since the pandemic began.

Four-fifths (81%) of the companies surveyed said they had applied reliefs to contract terms since the pandemic’s onset, with 69% granting or receiving time extensions, 59% renegotiating other contract terms, and 25% granting or receiving payments for additional costs.

77% of companies surveyed had used Alternative Dispute Resolution (ADR) to resolve an issue during the pandemic.

Jonathan Middup, a UK Claims & Disputes partner at EY in the Midlands, says: “Economic disruption and contractual performance issues on the scale we’ve seen in the last year would ordinarily be accompanied by a rise in claims as companies look to protect shareholder value. However, the exceptional circumstances presented by the COVID-19 pandemic have

 link source - East Midlands Business Link General

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