Case summary
Sally, a senior associate at Scots Family Law & Co, acted for Mrs West, advising her on her separation from her husband. There were lengthy and fraught negotiations, but Mrs West and her husband were unable to agree a division of their matrimonial property. When negotiations stalled, the firm raised an action for divorce at the nearest sheriff court on behalf of Mrs West. Some months later the parties were no closer to reaching agreement, and a proof was fixed.
Sally received an offer to settle from Mr West’s solicitor on the morning of proof, offering a capital sum that was lower than the figure craved by Mrs West. However, the offer also included periodical allowance and an arrangement regarding the transfer of share options.
Sally had to take Mrs West’s instructions on this offer at court before the hearing, having been given permission by the sheriff to take more time to resolve matters. After much discussion and shuttle negotiation with Mr West’s solicitor, Sally obtained instructions from Mrs West to accept the offer. The proof was discharged.
Now, several months after proceedings concluded, Mrs West has contacted Sally to say that she regrets accepting the offer. She has seen Mr West driving around in his new Porsche and feels that she has been unfairly treated. She tells Sally that she felt rushed on the morning of the proof and didn’t really understand the offer. She feels she should have received a higher capital payment and is taking advice about making a claim against Scots Family Law & Co. Sally is clear that the settlement reached was in Mrs West’s interests, and well within the parameters of what she may have received by order of the court if the proof had run.
Underlying cause of claim
This scenario will be all too familiar to litigation practitioners and could also relate to a personal injury action, a commercial dispute, or a hearing at an employment tribunal. There will always be some cases that result in a settlement on the morning of a hearing, even if every effort has been made to reach a resolution at an earlier stage.
If we assume that, in terms of the advice Sally gave Mrs West at court, another solicitor acting with reasonable care and skill would have given the same advice in the same situation, then we need to look at what might have caused Mrs West to feel so concerned.
Communication: Effective client communication is key at this stage. Sally will have been working hard to conduct these door of court negotiations and will no doubt have had several technically challenging conversations with her opposing number. However, if she didn’t keep communicating with Mrs West at every stage, or if she asked her for further instructions without fully explaining what she was being asked to agree to, Mrs West may have lost confidence in the process.
Preparation: Advance preparation before a hearing to anticipate likely settlement offers can remove some of the urgency. If Sally didn’t discuss the issues that were likely to arise with Mrs West before the day of the hearing, Mrs West won’t have had a chance to think about them in advance and may have felt overwhelmed on the day.
Follow up: It is important to follow up with the client after a hearing to answer any queries they may have and remind them of the discussions during negotiations. If this didn’t happen Mrs West might have forgotten some of the reasons why Sally advised her to accept the offer, and might not understand some of the more technical parts of the settlement.
Lessons to be learnt
Preparation. Advance preparation is so important. It is good practice to make sure, where possible, that you have considered all the parameters of a likely outcome of court action, and indeed of any last-minute settlement negotiations, and explained those to the client. You should explain in advance what your advice would be depending on different settlement scenarios, although of course it is not necessarily feasible to anticipate every possible outcome.
It is important to have conversations with the client in advance setting out what happens on the day of proof, and explaining the likelihood of last-minute offers.
If you anticipate an offer coming at all, consider whether you could have a partially drafted agreement with you which covers likely scenarios. If you do this in advance you can consider what the particularly tricky issues will be rather than having to think about them on the spot and under pressure.
Try to anticipate the thorny issues, for example:
Make sure that the impact of judicial expenses is being factored in to advice if that is an issue.
Think about whether time for payment of a capital sum needs to be included in any agreement.
Consider whether interest should be paid and at what rate.
Take the time to explain. Where the client has had adequate explanation in advance, they will be in a better position to give informed consent to a settlement and misunderstandings are much less likely to occur, particularly when there is prompt confirmation of the terms of settlement.
While conducting negotiations before a hearing it is really important to keep explaining the discussions to your client at every stage and to make sure they understand each development.
Don’t rush the client. Door of court negotiations are fraught and come with the added pressure of a sheriff or judge that is anxious to either start the hearing or release the court’s time. However, if your client doesn’t fully understand what is happening then you do not have full instructions. Make sure you have taken the time to answer any questions they have.
Keep a written record. This case study is also intended to flag up that good file notes are essential following a pressurised situation like a court hearing. As soon as possible, you need to prepare a detailed file note of all advice given verbally. If Mrs West makes a claim and there is no record of discussions at court, it will be difficult for Sally to evidence that she gave her client full advice. In other words– if it isn’t written down, it didn’t happen!
How to prevent these issues
The following action points may have helped avoid Mrs West’s complaint and potential claim:
Preparing for the possibility of settlement negotiations as much as possible; anticipating potential offers and discussing those with Mrs West before the hearing.
Preparing a draft Agreement to help identify the thorny issues that might need detailed discussions prior to settlement.
Taking a detailed file note of all settlement discussions. Take a junior colleague with you to a hearing if you have this option available to you. You can then concentrate on the negotiations with your opposing number and discussions with your client while your colleague takes notes.
Checking in with the client at every stage of the negotiations to make sure that they understand every aspect of the discussions.
Following up with a detailed written report to the client as soon as possible after the hearing.
Watching your own stress levels! Negotiating at court before a hearing is a highly pressurised situation. Although difficult to do, try to keep an eye on your own level of stress and take a break for a few minutes if possible.