How to Win in Legal Negotiations, by former Judge Stephen Gould
Stephen Gould: “Without prejudice” won’t work if you try to use it as a cover for inappropriate remarks like “Reject my offer and I’ll tell a bunch of lies in court.” I’m a better liar than you.
Today, he is exploring more strategies to reach a settlement.
In a civil case, someone will win, and someone will lose. In family cases, there are often no winners.
Although in a civil case, the parties, or one of them, may have in mind to compromise to some extent, they may feel that it is strategically better to postpone investigation into the settlement.
This may happen until after a lawsuit has been initiated and some procedural steps have been taken that would lead to a full trial – of which there are very few.
By then, perhaps after useful documents and even witness testimony had been uncovered, the opposition may have begun to hesitate. The strategy may be correct.
But when a claim (or defense) is made to the other side, it should be made as bluntly as possible, without exaggeration as this may backfire.
If compensation is sought that is not for a fixed amount stipulated in law, it can be at the upper end of what would be an appropriate range to allow room for negotiation, although not inflated to a ridiculous level, so it too can be counterproductive.
Ways to reach a settlement: using protocols
Before any court case begins, the system sets a background for the negotiations that are supposed to lead to a settlement.
This is done by the parties following what is called a “protocol” that fits a particular class of claim.
There are 16 different protocols for 16 different categories. You will find them at the back of Civil Procedure Rules 1998 Once you’re done enjoying your Game of Thrones box set.
Among them are protocols for claims for dwelling repair, personal injury, professional negligence (although previous judges have not advised favorably on This is Money and MailOnline), group travel, business and public authority debts, and construction and engineering disputes.
Each protocol requires you to send your opponent a letter with specific details about what you are saying and requesting and requires your opponent to come back with a detailed response within a period that can vary from one to two weeks, depending on the protocol. Three months.
If you fail to follow protocol and file a lawsuit, you won’t be locked up, but a judge may stay your claim until you do what you should have done, or you may end up paying the other party’s legal costs and expenses — or both.
Where your case is not covered by the Protocol, similar principles apply, and you must write to the other party before bringing a claim and give them a reasonable time to respond.
How long is not specific but the guidelines say two weeks where it is clear and no more than 30 days in a very complex case.
Persuading the other party to compromise: “without bias” messages.
At the same time as you send a protocol letter of claim, or even before that, you can try to settle the dispute by dangling a carrot (it doesn’t have to be organic) to the other side.
When you do this, you should write “without prejudice” at the top of the letter.
This way, the letter cannot be used against you in court if it does not lead to a settlement.
However, this protection won’t work if you try to use it as a cover for inappropriate remarks like “Reject my offer and I’ll tell a bunch of lies in court.” I’m a better liar than you. Something like this might work.
When a claim (or defense) is made to the other party, it should be made as bluntly as possible, without exaggeration as this may backfire.
Dear Legal Department
Return invoice B24/1796
I have separately provided you with full details of your company’s breach of contract. If I had to file a claim against her in district court, I would seek to:
(a) damages amounting to £xxx;
(b) interest on those damages at the rate of £8.00 per annum from the date of the breach until judgment;
(c) all court fees owed by me including hearing fees that will be generated for the contested hearing;
(d) travel expenses and loss of income for me and my witnesses at the contested hearing;
(e) Allowance at the rate of £19 per hour as a personal litigant for the time you spend in the claim including time in court and getting there and back on the basis that by defending the claim your firm will have acted unreasonably in all the circumstances the case.
I’d rather not have to go to court because I have better, more productive things to do with my time.
However, I would have no compunction about suing your company if it were necessary.
In the spirit of settlement and with a view to a prompt resolution of this matter, I am willing to accept full and final settlement of my claim for the sum of YYY or I am willing to relinquish my claim for interest provided that I receive from you the sum of £ZZZ within 14 days from the date of this letter.
This offer will expire at the end of that period.
For more substantive claims, it may be to your advantage to focus the other party’s mind on negotiation by making them a written offer to settle your claim during the case – or even before it.
This is an offer under Part 36 of the Civil Procedure Rules 1998 and I recommend you use the imaginatively named form N242A To do this.
On the other side you will be presented with the specific terms you are willing to settle on.
If the offer is not accepted, its details will be kept from the judge until after the case is decided.
The consequences for the other party could be severe if the offer is not accepted, the case goes to trial and the judge gives you what you offered to accept or more.
They will likely pay you an additional 10 percent on top of any payouts you receive at different rates for a huge prize of more than half a million dollars.
Furthermore, you all must recover your costs from the other side plus interest on damages and costs.
Making an offer at the right level is an art and legal advice is recommended for it.
Turn to the Ombudsman
There is an ombudsman for almost everything although they have not yet come up with an ombudsman for toilet brush manufacturers.
Among these most in demand are ombudsmen for financial services, legal services, housing and – more recently – for new homes.
Each Ombudsman Service usually decides the complaint on the papers submitted by each side, so there is no opportunity for the opposition to be torn apart in the witness box.
The service will be free and is therefore a useful alternative to court proceedings in low-value disputes – although the Housing Ombudsman who primarily deals with complaints against social landlords has been issuing some really big awards in the past few weeks.
If you do not agree with the Ombudsman’s decision, you can always reject it and file a claim in court.
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