Tradies: how to deal with client disputes

Tips & Tricks

It’s not a pleasant topic to talk about, but disputes with clients can happen. When they do, it’s good to know what to do to sort the issue out as soon as possible, with the best result for both parties.

People make mistakes, and it’s human nature to dig our heels in, even if we know we’re wrong. Whether you’re the one who messed up, or your client is being difficult, the important thing is to ensure you cover your arse and make sure you get the best possible outcome for your business.

tradies-dealing-with-disputesCommon disputes arising between tradies and clients

Most disputes between tradies and clients occur because:

  • There are delays in material delivery to the job.
  • The client makes changes but doesn’t want to pay for them.
  • Design flaws cause issues on site, and require time and money to put right.
  • Other subcontractors working on top of you disturb the integrity of your work.
  • Clients don’t pay their invoices on time, or at all.
  • Personality clashes lead to tension.
  • The client has unrealistic expectations about the job.

When you can see a situation escalating toward a full-on dispute, what should you do?

1. Calm down.

We’ve all come into a confrontation a bit hot-headed – it never ends well.

In an ideal world, all disputes would be dealt with in a businesslike way. However, it can be really difficult when clients, suppliers, or contractors are taking money out of your pocket, especially if the source of the dispute isn’t your fault. It’s human nature to get defensive.

If you’re struggling to keep your cool around a client, then walk away and calm down. Tell them you’ll contact them later with a potential solution. Once you’re away from them, then you can lose it.

2. Check your records

The first step with any dispute is to lay out the problem and check all your records for the job. You need to see what’s gone wrong, and how.

Talk to the team members who dealt with the job and make sure you get as full a picture as possible.

If you’re lucky, a simple fix will present itself. However, you’ll usually find that small mistakes and issues all compound together to produce a thorny problem.

If you’re using Tradify to manage your jobs, it’s as easy as finding the job on the app. You’ll have all the job data stored there. If you’re using the photos function, your team will have stored images of their completed work against the job – useful if the finish of the work is in dispute.

If you’re not using Tradify, you might have a ton of paperwork to sift through.

3. Refer to your trade association

If you belong to a trade association, such as Master Electricians Australia or Certified Builders NZ, they’ll have an established complaints process and best practice guide for resolving disputes. Most trade organisations supply boilerplate contracts – if you’re using these, check the contract wording for the dispute process you agreed to with the client.

Your trade association may also be able to provide an inspector or mediator who will go with you and the client to site, inspect any work undertaken, and assist you and the client to achieve a suitable result. Give them a call – they are there to support you and help you manage and grow your business.

4. Try to work it out

I know, I know – we all want to be right, and we want the other party to acknowledge the fact.

Sometimes, the best solution for a dispute is not about proving you’re right, but about giving your client a solution that satisfies them, without disrupting your business or ruining your good name.

If at all possible, try to work things out with the client. Offer a compromise – most of the time, people are perfectly reasonable. Once they’ve had time to cool down, they’re happy to accept a compromise instead of escalate the issue.

Calmly and rationally explain your side of the story, and try to understand their side, and what they want the outcome to be. See if you can meet somewhere in the middle.

5. Independent mediation

If you’re not able to reach an agreement with the client, the next step you should look into is independent mediation. The mediator will listen to both sides of the story, define the crux of the dispute, and then present settlement options.

Neither party is legally obligated to accept the mediator’s ruling or settlement terms, but at this point, your only other option may be court, and that can be expensive and disruptive to your business.

Check institutions like the Australian Mediation Association and the New Zealand Dispute Resolution Centre for mediators available in your area.

6. Preventing disputes in the first place

Ideally, you’ll never have to deal with a client dispute. There are things you can do to help prevent a bad situation escalating to a full-on dispute. You should:

  • Keep excellent records. Use Tradify to organise your jobs and paperwork so you never lose vital information again.
  • Sign a contract. A contract that carefully outlines the job and a dispute resolution process protects both parties in case the relationship breaks down. Your trade organisation might have contract templates you can use as a base for your own jobs.
  • Get changes in writing. Clients make changes all the time, which are often the jumping-off point for a dispute to occur. Make sure you record details, measurements, and plans in writing and get the client to sign them off before work commences.
  • Trust your gut. Got a bad feeling about a client or job? Science shows us that “gut instinct” is actually a survival mechanism. If you’re getting bad vibes – just say you’re too busy and move on. Another job will come along.

Disputes are a complex and unfortunate part of being in business. Hopefully, you’ll never need to deal with one. If you do, we wish you all the best for a speedy resolution.