I can't tell whether to settle or keep fighting
There's an offer on the table, or a dispute coming, and no clear view of what our case is actually worth.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
When an account is in dispute, you have three choices: keep reviewing, negotiate, or take formal steps. The decision usually gets made on feeling. The team is sure it is right, and the headline claim looks big. Neither tells you what the case is worth.
What matters is harder to see. What can you actually prove on your records? Which legal or factual points are still open? What will the next stage cost in fees and your own time? Can your main contractor pay if you win? Get that wrong and you either take an offer below your worst case, or turn down one above your likely result.
The solution
Value each head on your own records as a range: best, worst and likely. Price any open legal point as open, not won, and take it to your solicitor. Set the range against the offer, then take off the cost of going on, your own time and the risk of not collecting. Agree who can accept, and at what figure, before anyone replies.
Final Account Claim builds that range from the records and writes down every assumption behind it. We then run the counter-offer and the negotiation in your name. We do not predict what an adjudicator would decide. We put a price and a cost on each option, so the offer can be measured against something.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor's £310,000 claim has drawn an offer of £175,000 from the main contractor, open for 14 days. The directors cannot agree whether to take it.
What happens
- On the records, the supported range is £210,000 to £255,000.
- £55,000 of the claim turns on whether a notice was given in time. That question sits with the solicitor, and it is not priced as won.
- Against that range go the preparation still needed before any referral, and the directors' own time over the next 3 months.
- The main contractor's filed accounts are read: they show cash tight enough to make collecting on any decision slow.
- Authority is settled in advance: the board will accept anything above £200,000 with payment inside 60 days.
- Every assumption behind the range is written down, including the one the solicitor has not yet answered.
- The counter goes in at £240,000 with the supported schedule attached. The main contractor moves to £215,000, paid in two instalments over 60 days.
The positions in figures
| Item | Amount |
|---|---|
| Claim | £310,000 |
| Offer | £175,000 |
| Supported range on the records | £210,000 to £255,000 |
| Board's floor | £200,000 |
| Counter | £240,000 |
| Settlement | £215,000 |
The outcome
The board takes £215,000 over 60 days. Nobody predicted what an adjudicator would decide. The offer was simply measured against a priced alternative.