The majority of contractual cases, whether in court or otherwise (arbitration, mediation) are settled through reconciliation between the parties.
Occasionally however parties will refuse to consider a good settlement if it violates some internal principle, such as no fault payment. It is, no surprise then why solicitors report that enforcement continues to be the most significant hurdle!
Know your Adversary
Suing and pursuing a judgment against a company without assets is fruitless. Always
perform an asset check and you should make the check as broad as you can afford based
on the amount in contention. If the jurisdiction of the adversary allows fraudulent
conveyance, consider immediately bringing a local action to preserve assets. This action
will give you leverage in negotiation. No company wants to have its assets encumbered.
Be aware, however, that in most jurisdictions, you may be required to post security in the
form of a bond or letter of credit in order to obtain such injunctive relief.
You should also know your adversary’s business plan as well as your own. Are they considering fund raising? Have they recently changed the management team? Do they have end of year reporting requirements? When do they formulate the budget? What level of authority is required for the settlement you hope to achieve? What other actions or lawsuits are they engaged in? Are they planning to bring a new product to market? Are they involved in any M&A activities? Understanding the internal drivers for your adversary is a key factor in winning a settlement.
In Person Meetings versus “battle of the forms”
Exchanging letters, emails, files should be reserved for disputes that are likely to be arbitrated.
You must document the course of the discussions, but there is a difference between posturing and documenting. If a cost benefit analysis is dictating that you settle a case, then sit down across a table, and discuss the situation. Email and correspondence are never as effective as face-to-face meetings.
Use a Third Party Intermediary
Often both parties have a relationship with an individual, who might serve as an intermediary. The individual must be devoid of any interest in the outcome of the dispute and must understand any cultural differences between the involved parties. Each party selectively advises the intermediary of its position and asks the intermediary to serve as a go-between.
Mediation, before or after initiation of an arbitral demand, can be useful if you select the right mediator. Look for someone with knowledge not only of the law but also the industry and/or the cultures involved.