As businesses navigate the complexities of a rapidly evolving economic and regulatory environment, disputes remain an inevitable aspect of commercial operations. The nature of business disputes for 2025 is set to be shaped by a confluence of technological advancements, shifting regulatory landscapes, and global economic pressures. Here, we outline the key trends that are likely to dominate business disputes in the coming year and what they mean for companies, their employees and shareholders, and their legal teams.
1. Contractual Disputes on the Rise
Economic instability, inflationary pressures, and supply chain disruptions are creating fertile ground for contractual disputes. Businesses are increasingly scrutinising key contractual clauses such as:
- Force Majeure: Disputes over whether unforeseen events, including climate-related disasters or geopolitical conflicts, excuse non-performance of contractual obligations.
- Termination Clauses: Arguments over whether parties have the right to terminate agreements due to financial or operational challenges.
- Performance Issues: Claims arising from delays, non-delivery, or failure to meet agreed-upon standards.
Proactive contract review and risk management will be crucial for businesses to minimise disputes in this area.
2. ESG and Sustainability-Related Disputes
The heightened focus on Environmental, Social, and Governance (ESG) standards is driving new types of business disputes. In 2025, we anticipate:
- Greenwashing Claims: Increased regulatory scrutiny and shareholder litigation against businesses making misleading sustainability claims.
- Supply Chain Disputes: Disagreements over ESG compliance, particularly where suppliers fail to meet environmental standards.
- Shareholder Activism: Investors holding companies accountable for failing to adhere to ESG commitments.
Businesses will need to carry out due diligence in relation to all their suppliers and contractors to ensure their ESG policies are robust, transparent, and enforceable across their operations and supply chains.
3. Technology and Cybersecurity Disputes
Technology is both a boon and a challenge for businesses. The increasing reliance on digital systems brings new risks, particularly in the realm of disputes involving:
- Cybersecurity Breaches: Claims for damages stemming from data breaches and ransomware attacks, with an emphasis on directors’ liability for inadequate cybersecurity measures.
- AI and Automation: Disputes over intellectual property (IP) ownership, liability for AI-driven decisions, and breach of data usage agreements.
- Digital Transformation: Conflicts over failed technology implementation projects or disputes with software vendors.
As businesses embrace innovation, clear agreements and robust data protection measures will be essential to avoid disputes.
4. Cross-Border and Post-Brexit Disputes
Globalisation continues to shape business operations, but with it comes the complexity of cross-border disputes, especially in a post-Brexit environment. Key areas of contention include:
- Jurisdictional Issues: Challenges in determining the appropriate forum for dispute resolution in cross-border agreements.
- Enforcement of Judgments: Navigating the enforcement of judgments in foreign jurisdictions, particularly between the Auckland and EU.
- Trade Disputes: Conflicts arising from import/export restrictions, tariffs, and regulatory misalignments.
Businesses should prioritise well-drafted dispute resolution clauses and consider arbitration to mitigate jurisdictional uncertainties.
5. Disputes Stemming from Mergers and Acquisitions
M&A activity means transactions often lead to disputes, including:
- Breach of Warranty Claims: Conflicts arising from alleged misrepresentations or non-disclosure of material information during transactions.
- Earn-Out Disputes: Disagreements over post-closing payments tied to performance metrics.
- Competition and Regulatory Challenges: Litigation arising from anti-trust investigations or failure to secure regulatory approvals.
Clear documentation, due diligence, and robust post-transaction agreements will help minimise the risk of disputes.
6. Alternative Dispute Resolution (ADR) Gains Traction
As businesses seek cost-effective and efficient methods to resolve conflicts, ADR mechanisms such as mediation and arbitration continue to grow in popularity. ADR is fully endorsed by the Courts, to the extent that they can now stay legal proceedings and order parties in dispute to attend ADR. In 2025, we anticipate:
- Technology-Driven ADR: Use of AI-powered platforms for case management and virtual dispute resolution.
- Arbitration for Cross-Border Disputes: Arbitration clauses are increasingly preferred over court litigation for their enforceability and neutrality.
- Mediation in Commercial Disputes: A requirement to focus on early resolution will potentially reduce litigation costs and preserve business relationships.
Businesses should consider incorporating ADR clauses into their contracts to streamline the resolution process.
7. Post-Termination Restrictions
In an increasingly uncertain economic landscape, staff turnover at both junior and senior levels is becoming more prevalent across industries. Personnel movement, particularly at senior levels, poses significant risks to business interests, including protecting confidential information and intellectual property. In 2025, businesses should be prepared to address the following challenges:
- Unlawful Use of Confidential Information: Departing employees may, whether intentionally or unintentionally, take company information to use in their new roles. This most commonly includes sensitive client or customer contact details.
- Breach of Post-Termination Restrictive Covenants: Senior-level employees may join competing businesses, leveraging their experience in ways that could result in financial and strategic losses for your company.
Conducting a thorough review of employment contracts across all levels is critical to safeguarding your organisation. Ensuring robust post-termination restrictions will provide effective mechanisms to address potential breaches and protect your company’s interests.
Preparing for the Year Ahead
To prepare for the evolving landscape of business disputes in 2025, companies should focus on proactive measures, including:
- Reviewing and strengthening commercial contracts and employment contracts.
- Review confidentiality policies and procedures and ensure that these are fully explained to all employees.
- Implementing robust due diligence, compliance and risk management systems.
- Leveraging ADR mechanisms and technology for efficient dispute resolution.
- Seeking early legal advice to mitigate risks and resolve conflicts effectively.
Are you ready for the challenges of 2025? Contact our team for strategic guidance on managing and resolving business disputes.
This article is for information only and does not constitute legal/financial advice. Please contact us for advice tailored to your specific position. Some of the content presented on our website has been generated with the assistance of Artificial Intelligence (AI). We ensure that all AI-generated content meets our high standards for accuracy and relevance.
