Business partner disputes settled without a trial.
Independent mediators and advisory counsel for partner exits, profit share arguments, expulsion and dissolution. Confidential, fixed fee, and structured to produce signed terms in a single day.
A business partnership breaks down in a very particular way. Two or three people who trusted each other completely stop agreeing about money, workload or direction, and within months they are arguing about drawings, client ownership, the lease and who introduced which contract. Because most partnerships are built on a handshake or a short agreement signed years earlier and never reviewed, there is rarely a clean contractual answer, and the argument turns personal quickly.
Litigating a partnership dispute is expensive out of all proportion to what is in issue. Partnership accounts have to be taken, valuations are contested, and the trading business loses value every month the argument continues. Mediation deals with the same issues in a day, in private, with both partners in control of the outcome rather than a judge who has never seen the business.
Clerk&Counsel places practitioners on business partner disputes in two distinct roles. As advisory counsel for one partner, reading the agreement, the accounts and the correspondence and giving a written view on entitlement and realistic outcome. As a neutral mediator where both partners want the matter closed. The roles are never mixed on the same dispute, and conflict checks are run before anything is quoted.
Business partner disputes we mediate.
- Partner exits and buyouts, including valuation of goodwill and work in progress.
- Profit share and drawings disputes where one partner says the split no longer reflects contribution.
- Expulsion attempts and disputes over whether the agreement permits expulsion at all.
- Dissolution and winding up of a trading partnership, including allocation of clients and staff.
- Competing partnership businesses, restrictive covenants and diversion of opportunities.
- Property held in one partner's name but used by the partnership.
- Professional practices, including accountancy, veterinary, dental, medical and surveying partnerships.
- Family partnerships, including farming partnerships where succession is also in issue.
The Partnership Act 1890 and what it means in practice.
Where the partners never signed an agreement, or signed one that does not cover the situation, the Partnership Act 1890 supplies the terms. Profits and losses are shared equally, no partner has a right to a salary, every partner must account to the firm for private benefits, and any partner may dissolve a partnership at will simply by giving notice to the others. There is no implied power to expel a partner, so an attempted expulsion without an express clause is usually a repudiation rather than a valid exit.
Where an agreement does exist, the issues are usually the notice period, the buyout mechanism, whether goodwill is paid for, and whether restrictive covenants are enforceable. Covenants in partnership agreements are treated more generously by the courts than employment covenants, but they still have to be no wider than necessary to protect the legitimate interest of the continuing firm.
Section 44 of the Act governs the order in which assets are applied on dissolution, and a partner who has advanced money beyond capital ranks ahead of capital repayment. Knowing where each partner sits in that order changes the settlement range considerably, which is why a short written advice before the mediation day is usually money well spent.
What actually happens at a partner dispute mediation.
The mediator receives short position statements and a core bundle in advance, then speaks to each side privately before the day to understand what really matters. Most partner disputes have a commercial driver that never appears in the pleadings, such as a mortgage application, a retirement date or a health issue, and the mediator needs to know it.
On the day the parties are usually in separate rooms, with the mediator moving between them. There is no evidence, no cross examination and no judgment. The mediator tests each side's assumptions about what a court would do, narrows the range, and drafts terms as agreement emerges.
The day ends with heads of terms signed by both partners, covering the exit payment and how it is funded, the timetable, release of personal guarantees and bank securities, treatment of the partnership property and lease, allocation of clients, staff and work in progress, tax treatment, and an agreed statement to clients and staff. Once signed, that document is binding.
Instructing a mediator or advisory counsel.
The process is short and the fee is fixed before anything is committed:
- Send a short outline of the partnership, the shares and the issue. Documents can follow.
- We run conflict checks and shortlist a mediator or advisory counsel with the right sector experience.
- A written fixed fee is issued, normally shared between the parties for a mediation day.
- Position statements and a core bundle go to the mediator and the day is listed, usually within two to four weeks.
Specialist areas within this practice.
- Partnership dispute mediation
LLP member and traditional partnership disputes.
- Shareholder dispute mediation
Company deadlock, unfair prejudice and share buyouts.
- LLP member dispute mediation
Member exits, drawings and expulsion under the LLP agreement.
- Partnership disputes
Counsel for partnership litigation and dissolution.
- Commercial mediation
The wider commercial mediation service.
Business partner dispute to resolve?
Send a short outline of the partnership, the split and what has gone wrong. A clerk will come back with mediator or advisory counsel options and a fixed fee.
Common questions.
How do you resolve a dispute between two business partners?
Almost always by agreeing terms of separation rather than by litigating. The partnership agreement, or the Partnership Act 1890 where there is no written agreement, sets the default position on notice, profit share and dissolution. A mediated day converts that legal position into a deal on price, timing, client and staff allocation, guarantees and what is said publicly.
What happens when there is no written partnership agreement?
The Partnership Act 1890 applies. Profits and losses are shared equally regardless of capital contribution, no partner can be expelled by the others, and any partner can dissolve the partnership at will on notice. Those defaults surprise most people and often change the negotiating position completely, which is why advisory input before mediation is worth having.
Is mediation binding?
The day itself is without prejudice and confidential. Nothing is binding until the parties sign a settlement agreement at the end of it, at which point it becomes a contract that can be enforced in the usual way.
How quickly can a mediation be arranged?
Typically two to four weeks from instruction, and faster where there is a deadline such as a bank facility review, a pending court date or an incoming buyer.
What does it cost?
A written fixed fee for the mediation day, agreed before instruction and normally shared equally between the parties. Advisory work is quoted as a fixed fee for a written opinion or an agreed hourly rate.
Are you a barristers' chambers?
No. Clerk&Counsel is a clerking agency and a trading style of Found First Digital Ltd. We place independent barristers regulated by the Bar Standards Board and non-barrister mediators, and the instruction runs directly between you and the practitioner.