Managing risks and disputes in the fashion industry

• Author: Heike Wollgast, Chiara Accornero, Ida Palombella, Federica Caretta
• Position: WIPO Arbitration and Mediation Center, Geneva, Switzerland/Deloitte Legal, Milan, Italy

Every day in the fashion industry, brand owners enter into contracts with partners and influencers from around the world. Disputes are not uncommon. That's why brand owners need to have access to a reputable dispute resolution method that knows the business and allows for fast and effective decisions. (Photo: Goran Jakus Photography / iStock / Getty Images Plus)

To stay relevant in the market you certainly need at least one of the following elements: an eye-catching advertising campaign, a well-organized e-commerce website, a catchy pay-off or slogan, an efficient and reachable customer service, and marketing initiatives to keep your fan base involved and interested in the brand. Even better, you need a mix of all these elements …and oh yes, you need a great product, but that’s a given, right?

Stakeholders in the fashion industry are on the lookout for efficient and affordable ways to resolve disputes.

Behind each marketing initiative stand legal pitfalls that may cause any brand to have to deal with a storm of angry customers posting not-so-kind comments on their social media accounts. Sound familiar?

Luckily, there are ways to avoid such pitfalls: prior vetting of advertising campaigns, new brands and new e-commerce platforms to ensure they comply with the applicable laws can help avoid the need to shut off a campaign or change a brand, or take other remedial action, once it is already out in the world.

Similarly, well-written contracts help brands understand what to do should anything go wrong. These can make a real difference when you are at loggerheads with your business partner – which can be highly stressful. Finally, we all know how important it is to keep the brand-fan community active and engaged by, for example, creating games or having the right influencer wear your products during the most fashionable event. Legal checks ensure that you have all necessary licenses and authorizations in place to be able to unleash your creativity without fear of associated legal wrangles.

But what if, despite all the above, something goes wrong? Within the fashion industry, cross-border disputes are not uncommon. Now, more than ever, the fashion business is global, reaching consumers in many jurisdictions. On a daily basis, brand owners enter into contracts with partners in different parts of the world and with influencers that are relevant to specific markets. With such a web of contracts in place, it is important for brand owners to have...