When I ask business people for their views on court proceedings, I am often greeted with the response “We don’t touch it with a barge pole”. Always an honest reaction but one often based on misunderstandings and certain prejudices.

The common misunderstandings tend to focus on costs and time. I always explain how through judicial case management, court cases are dealt with swiftly. I also point out that the court fixes costs budgets for the parties at the beginning of the case so that they know exactly how much the case will cost (and when key expenditure will be incurred).

The prejudices often focus on the lack of certainty/predictability of the judiciary. My response is that I accept that the courts do not get every decision right, most of the decisions by far are right. We do also have a good appeal system in this country, an appeal system which on several levels is the envy of many foreign jurisdictions.

Inevitably, every business will have to deal with clients or customers that have broken their contracts and who have caused them financial loss. Although it is often best for the parties to resolve the issues arising out of the broken contracts themselves, that is not always possible. Sometimes a party will also take advantage of the other party’s fear of becoming involved in court proceedings.

Any decision to settle or not to settle should never be taken lightly but if a real driver behind the decision is a fear of court proceedings, a decision based on that alone may not be the right decision for the business. Those that have to make that decision should ask themselves first:

  • What does the business need (as a minimum) out of this broken contract?
  • What are the options/consequences if the minimum cannot be obtained through negotiation?
  • What can I realistically achieve, by when and at what cost if I protect the business through court proceedings?

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.