SETTLEMENT DISCUSSIONS

Arbitration Settlement offers

Written by Graham Perry

Graham Perry M.A. Cantab FCIArb Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer

10 March 2021

You remember the problem? Party A authorises you to offer payment of £100,000 to settle a dispute. You then go to Party B but before you can convey the offer Party B informs you that they will accept £80,000. Ouch!

You could go back to A and tell them that they can settle at £80,000 instead of £100,000. They would be happy – a reduction of £20,000. You could draw up the settlement agreement recording £80,000 and both sides would be content.

But would that be fair? Can you keep the A’s authorised £100,000 offer from B who have agreed to settle for £80,000? Aren’t B entitled to know of the £100,000 offer even though they have a proposal at £20,000 less. It has been made. Aren’t you under a duty to disclose the higher offer to B. Or do you just keep quiet and allow the settlement to proceed at £80,000 knowing that at a future date A might inform B of the £100,000 offer.

But that apart – we are here talking about integrity and character. My view? Come clean. Inform both parties of both offers and suggest a further mediation over the difference in the two offers. You will be doing right by the parties and by yourself.

Do chip in with your own view

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