An interesting tale……..a recent judgment from the Technology and Construction Court provides a powerful warning that, even in the high pressure run-up to a full trial, and in circumstances where both parties were represented by solicitors, the court will give effect to a client's settlement of a dispute.
Facts - the underlying facts of Thameside Construction Company Ltd v Arthenella Ltd were that a company had appointed a contractor to carry out works to a listed Victorian manor house. The parties could not agree the sum due to the contractor and the parties each commenced proceedings.
Following an exchange of written settlement offers between the parties' solicitors, their managing directors spoke by telephone to try to settle the disputes. After the conversation, the contractor asserted that the parties had reached a binding agreement, but the employing company denied this.
Ruling - the court ruled that, as a result of the conversation, the parties had orally agreed that the company would pay the contractor £275,000 in full and final settlement.
Comment
This judgment highlights the tricky issues around settlement, and the need to be mindful of the potential implications of having discussions without the benefit of legal advice. More generally there are many legal and commercial factors which need to be taken into account when considering settling a commercial dispute which are summarised in this checklist.
If you do find yourself in a commercial dispute or even possibly so, as the case shows, it does pay to take legal advice so please do not hesitate to contact Isobel Milburn, our Dispute Resolution & Litigation Partner (im@baineswilson.com) or Partner John Wilson (jsrw@baineswilson.co.uk) who will be pleased to assist.
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09 January 2012
