Offers of Settlement Underutilised – Important Option – Almost never too early to make an offer

09/07/2015

The importance of properly considering offers made to you and properly considering offers to be made by you to the other party to resolve either particular issues or the whole of proceedings between the parties.

Usually the parties who have come to the stage of dissolution of their marriage or de facto relationship is interested wish to resolve the issues concerning property and children.

Children’s issues are often very difficult and emotional.   Property issues are often difficult.  However it is in the interest of the parties who now find themselves separated to try and settle on a reasonable basis all or as many as possible, disputes that arise.

Usually the parties to a marriage or a relationship have some knowledge of the financial position of the other.  As we have indicated elsewhere firstly ascertain the extent and value of the assets and then after making appropriate adjustments allocate those assets or the proceeds of sale of those assets as between the parties to the marriage or de facto relationship.  That pool of assets (having regard to the gross assets and liabilities) is available for distribution between the parties to the relationship, however those parties must bear the costs of the dispute.  Those costs are usually significant and become unbearable especially having regard to what is in dispute, often the costs are large compared with actual amounts in dispute between ones best case and worse case scenario.

Sometimes parties to a dispute indicate that they would rather pay their lawyers than the other party. This generally is an emotional response to the position they find themselves.  Lawyers and Consultants can and will usually help in resolution of the disputes.  The earlier one can resolve the matter usually the better.  However, disputes cannot resolve without appropriate knowledge of the assets, the liabilities and an understanding by the lawyers of the position that their clients find themselves.  Full disclosure as required by the Act is important to expedite this process without the parties incurring unreasonable costs associated with obtaining disclosure.  If there is unreasonable behaviour which results in unreasonable costs being incurred there is power for the Judge to make an order that the party with the unreasonable conduct pay the costs of the other party.

Sometimes there may be some dispute as to the value of particular assets.  Some assets are much more difficult to value than others and the variation between the extremes, the high value and the low value of some assets are a percentage greater than for other assets.  Businesses for example are difficult to value and in particular to value in accordance with the requirements to enable the Court to determine the valuation in accordance with the principals as required by the Family Law Act.  Valuation of other assets are more able to be valued within a reasonable variance from the actual value of the assets if they were to be sold. Some assets in particular for example motor vehicles and other minor assets compared with the size of the cost a great sum to the value as a percentage of the value to be attributed to those assets.  All these matters must be considered.

One process that is underutilised in the opportunity to make an offer of settlement.  This can be made at any time.  There are benefits in making an offer.  This opportunity to make an appropriate offer puts focus on the parties attempt to resolve the matter at an appropriate figure and distribution of assets well before the paties incur very significant costs which in the usual course are paid by each party to their lawyers, consultants,valuers and other expenses of the proceedings.

The Family Law Act (Section 117C) provides that an offer can be made in most circumstances and the offer is confidential, in that it is not to be disclosed to the Court other than in relation to an application for costs. 

The first benefit of making an offer is that it may be accepted and the dispute may be resolved.  This will save each party from the process of incurring significant additional costs legal, valuation, expert and the emotional costs when the dispute can be reduced.

The second benefit of making an offer is that it may lead to a settlement once each of the parties have properly focused on the appropriate outcome. 

A collateral benefit is that once an offer has been made and if the proceedings are not settled if the outcome is more favourable to the person who the offer was made to that person is at risk of paying not only his or her costs but also the costs of the person who made the initial offer. 

Further, additional benefit is that offers can be put to resolve matters on a basis which would not be available to the parties through the Court process.  For example, an appropriate Court has obligations to in effect separate the financial affairs of the parties whereas with cooperation sometimes it is in the interest of all parties to have a structured non-destructive resolution.  We have over the years structured many settlements for the benefit of all parties as opposed to the destructive process of battle through the Courts.

We have heard all the reasons why an offer should not be made, but once the appropriate information is available it is appropriate to make an offer.  The offer can be counted in terms in regard to the circumstances at the time whatever they may be. 

At Watson & Watson Family Lawyers Richard Watson, Dennis Grant and the team are the first to encourage proper consideration of the appropriate offer and to make that offer.  The earlier the offer is made the greater outcome can be achieved in either having the matter settled at the same time with the appropriate savings or the matter cannot be settled at this stage putting pressure on the other party to properly consider an appropriate settlement or, in the unfortunate event that the matter must be determined by a Court to give you an opportunity to receive reimbursement for some of your costs that you have incurred in the process.  If you have any queries please telephone Richard Watson to discuss the matter.

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