The advantages of an early settlement

Welcome back to part two of this three-part blog series by Roanna Cooling, solicitor in our Dispute Resolution team. In this blog, Roanna will be considering the advantages of an early settlement and addressing the concern that agreeing to compromise is the same as waving the white surrender flag.

We get it – disputes are not easy and litigation can often be a protracted and costly process. It can be all-consuming at a time when you no doubt have better things to be doing. So instead of viewing a settlement as a surrender, you should consider the actual, and perhaps less obvious, benefits of that early compromise.

1. Costs

Perhaps the biggest bar to commencing or defending legal action is the cost associated with such action. It is imperative, especially in low to mid-value claims, that you consider the commerciality of what is being claimed versus the cost of pursuing a matter – and not just the direct financial cost but also the time and administration cost of being engaged in litigation and, say, away from your business.

One way to reduce the potential cost burden of taking a dispute ‘the whole way’ is to consider an early offer of settlement. This can provide for a fast resolution of the dispute, and a faster resolution will almost always result in less cost.

2. Time

Disputes and litigation take up a lot of your time; time which could be spent more profitably or enjoyably elsewhere. If a reasonable settlement can be reached, which involves a compromise by all parties, is this something that would benefit you in the long term, notwithstanding perhaps an immediate, short term sense of frustration?  

3. Preserve relationships

Whether they are business relationships or family relationships, a protracted dispute is one way to burn those bridges. Sometimes that will be worth the potential benefit, or the relationship may not be salvageable, but it is something you ought to consider.

It is important to remember that we cannot force a party to be reasonable, and if one party is principled and becomes entrenched in their views, it can become very difficult to agree on a reasonable settlement.

That is why it is important that you have your objectives in mind, and what you would want to achieve, and at what cost. In many circumstances instructing solicitors and commencing a formal ligation process may be the only way to achieve that. But it isn’t always, and if parties are reasonable, often a settlement can be reached with the help of legal professionals.

4. Control

The Court is restricted to certain actions it can order and certain things it can award. A settlement outside of Court gives the parties the ability to agree whatever suits them, and whatever is required to get a deal over the line. This could be something that is unconventional but that is nevertheless particularly important to a party. The ability and freedom to create your own settlement terms, without being constrained by the Court’s restrictions on what it can order, is a significant advantage of settling by agreement.  

5. The balancing act

As appealing as these advantages may sound, it is important to remember your objectives and your concerns. That is why we will assess the value of your claim, the prospects of success, the likely costs of a matter, and your objectives at every stage of a matter. We do this so we can help you decide the best course of action for you when balancing those objectives.

6. How do we reach a reasonable settlement?

You may be wondering how best to reach a settlement, and what strategies we may use to achieve the best possible outcome for you. For that, we suggest you keep your eyes peeled for the final blog in this series: Alternative Dispute Resolution: a focus on mediation.

If you have any queries in relation to the issues raised in this blog, please contact Roanna Cooling, litigation specialist at Hughes Paddison Solicitors, on RCO@hughes-paddison.co.uk or 01242 574244.