When To Settle, And When To Fight

To Fight or Not to Fight, Understand Your Options

The ‘Woolf Reforms’, which brought in new Civil Procedure Rules and promoted the importance of Alternative Dispute Resolution, laid heavy emphasis on encouraging parties to settle cases wherever possible. Whilst there are often good reasons to consider settlement, it is not always the best option. It is important for any claimant to know the signs of when to settle, and when to fight.

Reasons To Settle

Lord Woolf made ease of settlement a primary objective of his reforms for a good reason. Too many cases go to court simply because of the momentum of the claim process, when in fact the parties simply need to get together to discuss the issue. This is particularly true if you are in a dispute in which it is important to preserve an existing relationship. A negotiated settlement is far superior to a court judgement when dealing with a neighbour or business partner. It also normally means that both parties will spend less on legal costs. This may not make lawyers happy, but it is a great weight off of the minds of claimants.

Consider Your Objectives

Of course, settlement is not always the best option for your claim. It may be that you do not trust the other party to stick to their side of an agreement, and consider that you may have to go to court for enforcement in any event. You may feel that the opposite party simply does not have a leg to stand on in their defence, and that they are drastically overestimating their chances. In addition, it may be that you simply want ‘your day in court’, and nothing less than the full process of litigation will satisfy you. As long as you are willing to bear the burden of potential legal costs should you lose, there is nothing wrong with this. As long as you have properly thought through what you are trying to achieve with your claim, not settling can be perfectly sensible.

Calculate Your BATNA

One of the best ways to keep the financial cases for settlement and continued litigation at the front of your mind is to calculate your ‘Best Alternative To A Negotiated Settlement’ (BATNA). In essence, this is the sum of money which you feel it is likely you will receive if the case goes to trial. For example, if you were to feel that your claim is worth £100,000, and that there is a 75% likelihood of success at court, your BATNA would be around £75,000. This is the sum below which no settlement offer should be accepted. Clearly, if your opponent is offering £50,000 to settle the case immediately, it will not be worth your while financially to accept. However, remember to consider the stress of litigation when making any decision, along with your key objectives. Decisions on whether to settle can ultimately only be made by taking all of the circumstances into account.

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