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Proper dispute resolution is important in protecting a company from unfavorable conditions.
Synergy Strategies has to consider the potential benefit of every stakeholder in dealing with disputes that arise.
The purpose of the presentation is to explore 4 disputes experienced in the company, claims and evidence given by the company and recommend solutions.
Introduction
It is very important for any company to handle disputes appropriately in protecting the organization from financial losses. In a company such as Synergy Strategies that deal with different stakeholders and parties, determining the long term interest of the company to the stakeholders is crucial in maintenance of long term success of the company. The presentation explores every dispute presented on Synergy Strategies, evaluate the claims made by the company, evidence provided and make appropriate recommendations in solving the presented disputes.
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Abdullah (Abdullah) -
Abdullah (Abdullah) - It would help if you included the task or topic in the heading - that way, the audience would know very quickly which of the 4 tasks you are focusing on.
Abdullah (Abdullah) - It would also be helpful to add the specific accounting standard that this is related to
Abdullah (Abdullah) - On each slide, you have full sentences. However, we rarely use full sentences on presentation slides to a client. Instead, could you use an infographic or key words / bullet points to express the main ideas
Synergy Strategies experience 3 disputes.
The first dispute involves a former employee seeking damage for unlawful termination.
The second dispute involves a breach of contract by a supplier with the company.
In dispute three, a customer accuses Synergy Strategies of loss of reputation and seeks damage compensation.
Company’s information (task details)
In the first dispute, a lawsuit was filed against Synergy Strategies by a former employee who alleges that she was wrongfully terminated. The employee is seeking damages of $10,000,000. In the second dispute, Synergy Strategies claims that the supplier breached a contract, and Synergy Strategies is seeking damages of $5,000,000. The third dispute involves a claim by a customer who alleges that the consulting services provided by the company caused financial and reputational damage to their business. The customer is seeking damages of $3,000,000.
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Abdullah (Abdullah) - You seem to be repeating information that the client already knows. But the message needs to be your response to the task and advice to the client.
In the first dispute, the company is offering a $8000000 as damage in place of $10000000.
In the second dispute, the company lacks sufficient ground to predict outcome as clause is under review.
In the third dispute, the company claims the case lacks merits thus customer will lose.
Claims and evidence
In the first dispute scenario, based on the nature of the case, the lawyers of the company have already verified and expect the case to cost the company approximately $8,000,000. In the second scenario, Synergy Strategies expect to be compensated on contract breach basis from the supplier. Upon compensation, the company will benefit through increased income which in this case the expected compensation is contingent income. However, the disputed clause is already under review by the Independent Commerce Commission of New Zealand. In the customer’s claim scenario, the legal team has already predicted the case will not favor the customer.
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Abdullah (Abdullah) - Same issue as slide 3 here - you are repeating known information from the case. Instead, try to focus on explaining your response and advice to the client, and which accounting standard it refers to.
In the first case, Synergy Strategies should examine the law, evaluate impact, disclose in statements.
In case 2, the company should prepare for the contingent income but not recognize expected compensation as revenue yet.
In case 3, the company should prepare for loss through increasing provision for contingent liabilities.
Overall evaluation and recommendation
In case 1, upon verification of violation of the terms, the company should assess the legal penalties charged on companies accused of unlawful termination of employees. Having a complete understanding of the prevailing penalty is important in determining validity of the compensation demanded by the former employee from Synergy Strategies. With presence of a reasonable probability that the company will lose against the former employee, Synergy Strategies should make provisions for the litigation liability. In disclosing the litigation loss, the company should debit the legal expense account and credit legal liability. In case 2, Synergy Strategies should not disclose the expected income from the case before the outcome of the review process is obtained and the effect on the parties determined. In case 3, there is a need to prepare for any case outcome including ensuring Synergy Strategies is prepared with compensation fee should the court pass a verdict against the company. The most appropriate course of action is increasing provision for contingent liabilities with the minimum amount agreed upon by the legal team.
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