The first lesson in a business school finance course is that of the time value of money, the principle that a dollar today is worth more than a dollar tomorrow. This concept underpins most risk-taking decisions in business and, importantly, the financial metrics by which companies assess performance.
While it is expected that executives will bring financial rigor to all corners of their world, Covid-19 is increasingly exposing a significant blind spot — how companies manage complex disputes. Since 2014, the global aggregate value of international arbitration claims has grown at an estimated 10-12% per annum to approximately $2.4 trillion.
Covid-19 has only added to the burden of global disputes claims, based on fights for liquidity and other scarce resources across companies, sectors and countries. Reining in substantial legal costs and often larger opportunity costs requires a view of disputes not just as legal problems, but as business problems with consequences for the bottom line