Resolving Rural Disputes Webinar: Common Partnership Problems

• Published date: 14 November 2020
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Arbitration & Dispute Resolution, Real Estate
• Law Firm: Shepherd and Wedderburn LLP
• Author: Ms Alexandra Smith

Shepherd and Wedderburn's rural disputes team has shared key insights into resolving common problems through a series of coffee break-style webinars. These 15-minute sessions with our rural experts discuss topical issues such as encroachment, car parking, wildlife crime, access rights and open water swimming.

Common partnership problems

What can you do to avoid fall-outs in a family farming partnership? And how should you deal with problems if they do arise? In this on-demand webinar, Alexandra Smith, an Associate in our rural property and infrastructure team, explores common partnership problems and recommended methods of resolving such disputes.

Please see below for a written article from our rural disputes experts addressing common disagreements and resolution methods for partners. You can view and download a pdf copy of this article here.

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Many farms in Scotland are farmed by family group businesses who work together in partnership, whether harmoniously or otherwise! In Scotland, a partnership has a separate legal identity. It can own property, it can be a debtor and it can enter into contracts with its partners.

Even though Scots law partnerships have these attributes, any change in the membership of the firm means that a new firm is created. However, if the business being 'taken over' by the new firm is substantially the same as the old firm, it takes over the whole liabilities and assets of the old firm. In essence, the new partners take on the responsibility for the old partners' actions. Already, there is potential for a variety of disputes to arise simply because of the nature of the business.

The mere fact that the parties involved in farming partnership are often family members, means that it is a particularly sensitive and, therefore, ultimately contentious area of our practice. There can often be power struggles between parent and child or between siblings; or even between spouses who are in partnership together.

In the majority of cases, partners fall out with one another because of a lack of communication. Frank, open conversations that could address underlying issues are simply not had; whether that be due to the lack of time, the inability of the family head to pass on responsibility or because of the reluctance to have a difficult conversation.

Issues that are never addressed will invariably cause resentment between the partners, and result in a partnership fall out at a future date.

It is of utmost importance, therefore, that the...