How to settle on best terms

I do a lot of claimant work. A lot. Some blogs include references to tactics and costs building. It is only right that I seek to repent for these sins by explaining how defendants can GENUINELY settle on best terms.

Rule 1

“Settle on best terms” generally means “Settle this claim in the cheapest possible way”. Only on occasion will there be a reputation/brand issue to take into account as part of “best terms”. Rule 1 in this situation is therefore to treat your client’s money as if it is your own.

Rule 2

Repeat rule 1 to yourself (kind of like Fight Club…) This converts to rule 2 as being: achieving settlement in the cheapest possible way taking EVERYTHING into account.

Rule 3 (aka “what is everything to take into account”)

Remember that your client foots the bill for 3 things within their total reserve: (1) C’s damages; (2) C’s costs; and (3) D’s costs. Remind yourself of this again. Defendants frequently overlook the last section and incur ridiculous fees generated by taking silly points and/or investigating irrelevant matters.

Rule 4

Remember the aim is to try and cap claimants on damages and their costs. Do not run up £10,000 of extra defendant costs on chipping the claimant’s damages down by £5,000. In this time the claimant’s costs will probably also have increased by £2,500 in fighting out the damages argument. As referred to above, during this time your own bill of defendant costs will have also moved upwards. Is it worth it? No. Explain to your client that the claim may be overstated, however it is more economic to pay the additional damages to avoid the client paying out more overall.

Rule 5

This is a difficult one to stomach. It often pays to admit liability. Be blunt. If your client is on the hook then write an open letter to the defendant stating liability is admitted and you will not be paying them a single penny from that point onwards in relation to their time recording in respect of liability.

Claimants love nothing better than a caveated quasi-admission. Liability being admitted subject to causation just means the following to the claimant:

THEY WANT TO SETTLE SO LET’S RAMP OUR COSTS UP AS THEY HAVE NOT MADE A CLEAR ADMISSION.

A number of County Courts have granted pre-action disclosure applications to our clients on quasi-admissions. The defendant finds no favour in drawing their quasi-admission to the Court’s attention. My favourite was the DJ’s exchange with an opponent:

DJ – “Is liability admitted or not?”

Opponent – “It is subject to causation, Sir”

DJ – “No, Mr [name withheld], it is a yes or no answer. I expect a yes or no.”

Opponent – “Sir, I cannot say that it is, but that it is subject to causation”

DJ – “I read that as a no. The applicant will receive their causation documents and costs assessed at £1,500”

From the above you will realise that once liability is admitted, the defendant can take some control over the presentation of the claim by the claimant.

Rule 6

Demand the quantum evidence in a set manner. If you think that only invoices are needed without anything further then ask for this only. State in open correspondence that you expect to be served with these documents and refuse to pay for any other costs incurred by the claimant relating to quantum (e.g. witness evidence on this point, or an expert’s report on quantum).

Once you have assessed quantum, if it is not overstated then pay the claim. If only a marginal or nominal amount is overstated then consider whether it merits challenging the payment, as the claimant may incur a lot more money in instructing an expert or counsel. The claimant may be at risk of not recovering the disbursement of instructing an expert/counsel, however is it worth taking the risk if your client has to absorb this fee? That’s your call.

Remember that your fees will be incurred in considering and dealing with all of this. If you need witness evidence from the claimant then demand it only covers certain points. If the background is well made out then ask for it to address only set points only. If you need an expert to assess them, try to arrange it so the claimant only has to attend on their own and meet with your expert.

Rule 7

Invite details of C’s costs and make a well calculated global offer. Claimants will take early-money at a lower amount to avoid WIP lock-up and the costs of provisional or detailed assessment This is particularly useful if you know the year-end date of the claimant’s solicitors’ firm!

Over and out.

Legal Orange.

Get a following early in your career

Life as a solicitor is normally split into 3 types:

(1) Those who do business development (“BD”)

(2) Solicitors that fee earn alongside BD

(3) Fee earners.

I have not included support staff and back-office as they are not expected to bring in business or fees (but nonetheless serve a very useful purpose).

Who is in each category?

Category 1 types, tend to be senior members of a team such as a partner.

Category 2’s are senior associates being lined up for partnership and trusted associates (some of whom do not have partnership ambitions but are willing to do BD so long as it is credited).

Those in category 3 tend to be junior members of staff. While a small percentage will be oddballs untrusted to meet with clients, as they gain experience their exposure to BD is likely to increase.

Category 1

These are the rainmakers. The pressure falls upon their head to “get the work in”. It is these people who are obliged to tease files out of clients. At most firms these have 10 – 20+ years of experience in the industry. Some may be senior lawyers, although others may include non-lawyers with a large following such as former insurers and bankers.

Category 2

As stated above, they are either on the partnership track or can be trusted to behave in front of the clients. Lawyers who are on the spectrum or socially awkward are overlooked.

Category 3

These are those who get to determine their own pathway. Such lawyers are likely to be in the 1-3 PQE range.

How to get your own following?

• Produce high quality work;
• Manage expectations;
• Show commerciality;
• Talk to the clients by telephone and avoid hiding behind emails;
• Persuade category1 and 2 types of your ambitions to reach their level;
• Shadow category1 and 2 types while they do BD;
• Discuss non-law related subjects with potential clients when you do finally meet with them; and
• Manipulate whoever authorises client-related expenses to ensure any entertainment you put on for clients is enjoyable

Over and out.

Legal Orange.

If you are lucky enough to get a hearing nowadays then use it wisely…

Recent judgments have shown the Court’s frustration with litigants who take up their resources.

In Bluewater Recoveries -v- Secretary of State for Transport it was very clear that a hearing on a preliminary matter (limitation) was unnecessary as the issues needed to be determined at final hearing. I am unaware if a memo has been distributed across the Courts because the tax tribunal also recently ruled that an application for a preliminary-issue hearing was unnecessary (about domiciled status) in Clifton Hugh Lancelot De Verden Baron Wrottesley -v- HMRC. You know it’s serious when the tax tribunal hands down a lengthy judgment on an interim application hearing!

This was followed up by the QBD in Hornsby-Clifton -v- Ministry of Defence where the court also decided there was no good reason why there needed to be a split trial to separate liability and quantum.

Is it just the higher courts taking this approach?

All of these very recent decisions reflect this writer’s day-to-day experiences. There is a general trend to push litigants away from Court and I am trying to impress this upon opposing parties who seem to be inserting split-liability trials or preliminary hearings into draft directions. The way of handling these is to refuse to agree to such directions and inviting the other side to make an application if they consider their client needs to have such an approach. Out of the last 5 I can recall, none have gone taken up this challenge.

At the last CMC I attended, the sitting DDJ explained how much time was taken up with handling family court issues. He then went on to observe that as this case involved a bank and an insurance company on opposing side’s, then one of the parties “had better come up with a clever reason” to persuade him that a low-end multi track needed to potentially have 4 hearings:

– Costs and case management conference;

– Preliminary hearing;

– Pre-trial review; and

– Final hearing.

We were then kicked in our backsides to mediation. 3 days following our tongue lashing a Part 36 offer was made and accepted. Hint taken.

What do we learn from all of this?

Aim for the fewest number of Court appearances you can get away with. It is clear that Judges have gotten wise to the old trick of forcing another side to settle in advance of the hearing as a negotiation tactic.

If you do require a preliminary hearing then make sure you have a solid case, and it is not just a “sh*t or bust” gun slinging approach. Take Counsel’s advice (hint: Counsel on a CFA whose payment depends on winning is most likely to give you solid advice on such an approach!)

Over and out.

Legal Orange.