Bridging the gap or a bridge too far: the value of settlement meetings

01/09/2011

Chris Kirby-Turner is an Associate in the construction and engineering team at Thomson Snell & Passmore. Article first published in Kent Business in September 2011.

All areas have long been subject to a Pre Action Protocol, which requires the parties to exchange a Letter of Claim and Response, which set out the legal and factual basis of each side’s position. In some areas, such as construction and engineering, an off-the-record settlement meeting must also be held, before a party can issue court proceedings.

A consultation process is currently underway into the effectiveness of this requirement. Many have criticised it for being too cumbersome. The key problem comes where the meetings are used as a forum in which to try and out-shout the opponent – a tactic which has usually been thoroughly exhausted by the time lawyers are instructed.

With the right preparation and mind set, the meetings can be very productive and frequently do lead to sensible and timely commercial deals. The solutions can be outside the box, and not simply a matter of money. This can be the key to an early deal, where practical steps still carry value.

Once each side has done a proper home and away analysis of its strengths and weaknesses, and weighed up the true cost of a commercial compromise against a long, inherently risky and expensive foray through the courts, the gap may become bridgeable. At the very least, the key sticking points may be unlocked, for example by agreeing to seek the view of an expert on a particular technical issue.

Seen as a box ticking exercise, the protocol meeting can indeed be a bridge too far. If approached with the above in mind, it can (and frequently does) resolve otherwise entrenched disputes very effectively.