When it comes to litigation, it’s all about strategy.
The ultimate goal is to settle the dispute spending as little money on legal fees as possible and wasting as little of your valuable time as possible (time is money).
A tool that can be used to achieve this outcome is by making one of the two formal offers of settlement commonly used.
In a recent matter, a client was owed a sum of money – it seemed clear cut for our clients; work was completed, invoice was sent, and monies were outstanding.
Strategically, we advised our clients to make an offer of settlement that was slightly less than the debt that was owed. This was met with considerable questions, including:
- Why should I compromise when I am owed all the money?
- If I win shouldn’t I get all my costs back anyway?
These questions were met with a strategic response:
- Usually the loser pays some of the winner’s costs, however, if you make an offer and the party unreasonably refuses to accept this offer you could get ALL of your legal costs paid if you win…
- An offer puts pressure on the other side because they have to consider whether or not they should take it…
- If accepted, it will end the litigation and save you time, and…
- It gives certainty as to your matter (no-one can guarantee the outcome of your matter).
In deciding whether or not to award you ALL of your legal costs the Court will consider whether the offer was genuine and whether it was unreasonable for the other party not to accept the offer.
If you are in a litigious dispute, you need to carefully consider the benefits of making or accepting formal offers.
If the dispute is not settled after you’ve made an offer, then you may have the upper hand on costs if your matter proceeds to hearing and you achieve a better result!