You’ve been injured and you believe it was someone else’s fault. You’ve seen a solicitor and they agree. After evaluating your case and assembling the necessary information, they send a letter of claim to the defendant.
Under the Pre-Action Protocol for Personal Injury Claims, the defendant has a period of time (usually three months) to review his/her legal position. At the end of this period, your solicitor will probably begin some form of dialogue with him/her.
There are significant cost incentives to negotiate a settlement before going to court. If one party unreasonably refuses to negotiate, the judge will take that behaviour into account in assessing costs, an uncooperative party runs the risk of facing a larger bill for the other side’s costs if they ultimately lose in court and adverse costs rulings in interim court proceedings prior to trial.
In every case, litigation should be viewed as the option of last resort for the resolution of legal disputes.
In a comparatively low value claim (i.e., under 5,000) you may want to negotiate a settlement on your own. In a higher value claim, however, you’ll probably want a solicitor to do it.
If you consult a solicitor, they can only negotiate on your behalf if you provide informed consent. Moreover, your legal representative cannot agree any settlement unless you authorise him/her to do so.
Negotiations ordinarily begin with a meeting or telephone call, although sometimes they can take place entirely in writing. If the defendant is contesting liability, then ordinarily you should agree with your solicitor that you will not begin to discuss settlement with the defendant until each side has disclosed its evidence to the other. You do not want to agree a settlement, only to find that the defendant’s case was much weaker than you thought.
It is important that you and your solicitor go into the initial round of negotiations with a clear idea as to your objectives. Your main objective will probably be to get a general feel for the strength of the defendant’s case, and a sense as to whether the defendant is amenable to settlement or is going to dig in their heels.
In the initial discussion, the defendant will likely want to get some idea of the total amount you are looking to claim. Your solicitor might give the defendant some guidance as to what to expect, and provide the defendant with a general outline of your case (avoiding too much detail, and with an emphasis on its strengths).
So the initial discussion will be important, and may well set the parameters for the whole settlement process. You and your solicitor need to be extremely well prepared for it, and if you’re not, you should consider delaying it until you are.
Separating questions of liability and damages
Sometimes in negotiations (and even in court proceedings) the questions of the liability of the defendant and the amount of damages (which lawyers call “quantum”) will be split.
If your solicitor believes that you have a good chance of prevailing on the question of liability, you might want them to ask the defendant for an interim payment. This can be a good move, as it can provide you with funds to meet costs you may have incurred and already paid yourself. It also gives you leverage in negotiations, since the defendant will be aware that if the defendant’s position is weak on liability and they stonewall your request for an interim payment, then they may be liable for additional costs if you have to ask the court to order an interim payment.
Part 36 offers to settle
Part 36 offers can form an important part of the negotiation process. “Part 36″ refers to a section of the Civil Procedure Rules, which govern the way court cases are conducted in England and Wales, dealing with offers to settle.
Either party can make a Part 36 offer. If the defendant makes a Part 36 offer and the claimant does not accept it, the claimant will have to pay a proportion of the defendant’s costs if the amount of compensation ultimately awarded by the court is less than what the defendant offered. The same is true, in reverse, if the defendant refuses to accept a Part 36 offer from the claimant. Therefore, the Part 36 offer can be a useful tool, and the possibility of cost sanctions means that a party receiving a Part 36 offer generally will have to give it serious consideration.
Bluster and bullying are not synonymous with tough negotiation
Solicitors who are tough negotiators usually get better settlements for their clients. But what does “tough” mean? Although bluster and bullying might sometimes pass for toughness, more often it signals to the other side that your case is weak or that you and/or your solicitor are not well prepared.
The tough negotiator has a thorough understanding of their client’s objectives and will be tenacious about achieving them. They are patient, and sometimes content to leave issues unresolved for a period, allowing a point to sink in with the other side, or sometimes buying time to confer with you and come up with additional arguments and support for your position.
The crucial part of toughness, though, is a demonstrated willingness to follow through and go to trial if necessary. Sometimes lawyers (and/or certain clients) are reputed to be hesitant to go to trial, and will always eventually throw in the towel rather than be faced with trial. But a tough negotiator who is confident in their client’s case will be prepared to go to trial if necessary, and a solicitor who is known for going to trial when necessary (and winning) will immediately give a claimant a decided advantage in settlement negotiations.