Commercial: Deal or no deal.

This Technology and Construction Court case illustrates the care that needs to be taken when having direct discussions with your opponent in a litigation claim when seeking a compromise. Thameside Construction Company Limited (T) v Arthenella Ltd (A) (2011) EWHC 2695 (TCC ) involved a commercial dispute between T and A as to works completed to a Victorian House.

The dispute was as to the value of the works and whether A was entitled to liquidated damages for delay. The Trial was due to commence in October 2011, but the parties engaged in mediation in an attempt to settle.

The Managing Director of T held telephone calls with his counterpart at A on the 8th September to discuss settlement. T’s Managing Director asserted that they had made an agreement, A denied that this was the case.

Ramsey J, heard evidence from both directors and decided that he preferred the evidence of the MD of T. He gave a declaration that as a result of telephone conversations the parties had settled the dispute for £275,000. The Court was no doubt influenced by a contemporaneous note made by the director of  T and an email he sent shortly afterwards.  There was an email back from A’s solicitors, however the judge considered that this was “attempting to draw back” from the offer which had been accepted in the telephone call between the parties.

This is a lesson to all clients that if you are to engage in direct settlement discussions, then any conversations or direct discussions with the other side are “subject to contract”, the conversation must be consistent with the conversation between the parties and it is important that a contemporaneous note is produced.

For advice as to Commercial disputes resolution call Carruthers Law today or fill in one of our enquiry forms.

Revised May 2012

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