Avoiding Costly Court Proceedings Through Good-Faith Negotiations: Construction Case Study

Avoiding lengthy and costly court proceedings through good-faith negotiations between the parties in respect of a potentially litigious matter brings significant advantages, even if certain reciprocal concessions must be made in order to reach a settlement.

In a recent matter, I successfully assisted in concluding a settlement agreement which extinguished the reciprocal claims of several companies operating in the construction sector. During their collaboration for the performance of interior fit-out works, disagreements arose concerning:

These disagreements were further "facilitated" by contractual clauses insufficiently tailored to the factual circumstances, as well as by the failure to observe existing clauses, in particular those concerning:

Even in the context of deteriorated relations, the parties came to understand that the subcontractor's interest in quickly collecting certain amounts, the main contractor's interest in having predictability regarding the sums to be paid, and the avoidance of incurring substantial litigation costs, outweighed momentary pride or the pursuit of an absolute victory.

I consider that the role of the parties' legal counsel is of paramount importance: lawyers must prioritise their clients' best interests and provide accurate and comprehensive advice regarding both the chances of success and the implications of pursuing litigation before the courts of law.