We're going into a settlement meeting with no plan
No sense of what to concede, what to hold, or what each head is actually worth.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
What's happening?
Settlement meetings reward preparation, not conviction. Walk in with one number and a mood, and every concession is made up on the spot. You spend the first hour working out your own position.
Meanwhile the other side has done its homework. It knows what each item is worth, so it trades its weak items for your strong ones, politely, one at a time. Nobody keeps a running total, so you only find out what you gave away when you add it up afterwards.
The solution
Before the meeting, list every open head with your figure, their figure, the evidence, a target and a fallback. Mark what is agreed, what needs only a document and what needs a commercial decision. Decide which items you would rather trade than prove. Keep your limits on a separate sheet from anything the other side will see. Add payment terms as a head of their own, and agree who can approve an offer.
Final Account Claim values each head before the meeting, agrees your floor with you in writing, and keeps the running total during it. Anything agreed on the day is recorded as a proposal subject to wording. Authority, limits and the settlement wording stay your decisions, and your solicitor checks the release before anyone signs.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor's commercial manager has a settlement meeting booked for Thursday with fourteen heads still open. The subcontractor's total stands at £188,000 and the main contractor's at £97,000. Preparation starts on the Tuesday.
What happens
- On the Tuesday, a negotiation matrix is filled in. Each head gets the subcontractor's figure, the main contractor's figure, the evidence, a target and a fallback.
- Marking each row shows the shape of the gap. Four heads worth £31,000 need nothing more than a document. The delivery tickets and instruction emails are attached before the meeting.
- Four heads are already agreed in all but signature. Six are commercial decisions, and for those the manager decides in advance which two are worth trading and which four are worth proving.
- The target is set at £160,000 and the walk-away at £140,000. The running total is kept on the matrix during the meeting.
- The documented heads are agreed at £31,000 in the first 20 minutes, which lifts the main contractor's figure to £128,000.
- The two weakest heads, worth £24,000, are then conceded as a planned trade. In return, the main contractor moves on the four strong ones.
- What is agreed is recorded as a commercial proposal subject to wording. The solicitor writes the release and the settlement agreement before anyone signs.
The meeting in figures
| Item | Amount |
|---|---|
| Subcontractor's total | £188,000 |
| Main contractor's total | £97,000 |
| Target | £160,000 |
| Walk-away | £140,000 |
| Agreed at close | £152,000 |
| Carried to a further exchange of documents | £12,000 |
The outcome
The meeting closes with £152,000 agreed and one £12,000 head carried to a further exchange of documents. Everyone knows the total before they leave the room.