There’s no mistaking, the prospect of settling a complicated dispute can be daunting. But, the alternative way of ending a dispute by airing your dirty laundry through Court proceedings, in full view of a Judge, can be time consuming and costly; with the added disadvantage that there can sometimes be little certainty of success.
Many disagreements can be, and often are, negotiated and successfully settled without ever having to start Court proceedings. The first stop is to carefully examine the factual and legal issues arising from your dispute and develop an appropriate strategy. For the most part, having your case ironed out in front of a Judge at a Court hearing will and should be a last resort. Often the main objective will be to reach an amicable settlement, although in some circumstances, Court action is the only viable option.
Settlement can often occur after the parties have submitted details of their cases to each other. At this point, you can evaluate and compare the strengths and weaknesses of your own case against the strengths and weaknesses of your opponent’s case. It may be helpful to consider the criteria below to develop a strategy:
- Reputation: If the matter proceeds to Court, be prepared for the details of the dispute to enter the public domain. Even if the Judge rules in your favour, don’t forget to consider any adverse publicity which could result. A less favourable settlement which includes a confidentiality agreement may protect your business from negative publicity (or even further claims of the same type) and reap rewards in the long run.
- Post dispute relations: Consider the importance of your opponent to your business. Do you wish to trade with them again? Could you make future use of their contacts or knowledge? Evaluate your own bargaining power by considering these questions from your opponent’s point of view. Is your opponent likely to want to continue to trade with you? Be aware that by proceeding with a Court claim (or indeed any formal dispute resolution process), the trading relationship with your opponent could be irreversibly ruined.
- Timing: Your opponent may be persuaded to settle more promptly if they believe that your case has a very high chance of success at Court. Other factors that could speed up reaching a settlement include if your opponent’s finances are limited, meaning that legal fees could become problematic. Equally, if you have demonstrated that you are willing to pull out all the stops to succeed, your opponent may consider settlement to take the safer option.
- Outcome: Consider what you want to achieve from your claim. If it is money that you need, you are likely to recover it far sooner by a settlement out of Court. Once a settlement has been agreed, if your opponent does not pay up, you can apply to the Court for enforcement. On the other hand, it is almost impossible to establish when you’ll recover what is owed at the outset of a Court case. It can take a long time to get your case heard in Court (circa 12–18 months, depending on the Court’s availability). Even when the trial is over, your opponent may not have funds readily available to pay any sum awarded by the Court. Your opponent could, for example, have money tied up in several assets. In these circumstances, you may have to wait a significant amount of time before you receive payment.
- Management time: Before you even get to Court, a whole suite of documents will need to have been prepared, to deal with the disclosure of documents and drafting of factual witness statements. All evidence to be relied upon will need finding and sorting, which will require extensive communication between your colleagues and legal team. At the trial, it is likely that members of your management team will need to provide witness evidence. Being cross-examined can be a stressful encounter. You may take the view that this time could be spent more productively on running the business. If so, many of these time rich tasks can be avoided by settling out of Court.
- How about an apology? Remember that an apology can go a long way in reaching a satisfactory conclusion to a dispute. Depending on the nature of the dispute, and who your opponent is, an apology may be appreciated far more than financial compensation. It is worth noting that a Court cannot order such things as an apology, whereas a key benefit of an out of Court settlement is that the terms are flexible to suit the parties.
- Are you willing to compromise? Expect to meet with your opponent somewhere in the middle in terms of cost and liability. It is unlikely that you will walk away from signing your completed settlement agreement feeling like a winner. However, as long as you are content with the result you and the members of your management team will be able to get on with running your business.
Once you have considered all of the relevant factors of your case, you can plan out what it is you are ultimately hoping to achieve, and stride forward in bringing a satisfactory conclusion to your dispute.
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