Value the case before you value the fight
Before you refer anything, value the disputed heads of your final account at best, worst and likely, on your own records. A fight is only worth it if the likely result, less its cost in fees, time and attention, beats the best offer on the table.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
Why it matters
The decision to fight is usually taken on feeling: they owe us, we are right, we are not letting them get away with it. Feeling does not pay the fees. The real question is simple. What are the disputed heads worth on your records, in the likely case? Take off what the fight costs in money, management time and attention lost from other work. Then compare that with the best offer on the table. Written down, the comparison often shows that a fight worth running on the best case is not worth running on the likely one. And a settlement that felt like surrender can turn out to be the better number.
How to do it
- Value each disputed head at best, worst and likely on the records you actually hold, with the reasoning in writing.
- Add the likely values to give the likely recovery, and set the best current offer beside it.
- Ask your solicitor and your own team for a realistic figure for fees and time through to a decision.
- Add the management hours the fight will take up and the work it will push aside.
- Compare the likely recovery, less costs, with the offer, and decide in writing with the assumptions stated.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor has an offer of £95,000 to close a final account dispute where £190,000 is claimed. The commercial director wants to refer the lot. The surveyor values the position before anyone instructs a solicitor.
What happens
- The heads are valued on the records: best £170,000, likely £125,000, worst £60,000.
- Fees and expert costs to a decision are put at £30,000, and management time at a further £8,000.
- Likely recovery less costs is £87,000, against the £95,000 offered now.
Fight or settle
| Item | Amount |
|---|---|
| Likely recovery | £125,000 |
| Less fees and costs | -£38,000 |
| Net likely outcome | £87,000 |
| Offer on the table | £95,000 |
The outcome
The subcontractor counters at £115,000 with the head-by-head reasoning attached. It settles at £105,000 a week later, and keeps the £38,000 and the director's attention for the next job.
To have this done for you, see our Final Account Claim service.