Construction dispute settlement is a commercial calculation. It is frequently treated as a question of principle, and treating it that way is expensive for whoever does it.
The useful framing is simple. What is the likely outcome, what does each route cost to reach it, and what is the value of the time and relationship consumed on the way.
Report a range, not a number
A single figure invites a negotiation with no structure. A range gives a board something to decide on: a defensible position, a likely settlement, and the exposure if the matter runs.
The defensible position is what the evidence supports if everything goes well. The likely settlement is what similar positions actually resolve at. The exposure is the downside, including costs.
Presenting all three is more useful than presenting the best one, and it is the difference between advice and encouragement.
The costs usually left out
Legal and expert fees, which in adjudication are generally not recoverable even by the winning party. That alone makes small claims uneconomic.
Management time. A dispute consumes senior attention for months, and that attention has an alternative use that is usually more profitable than the amount in dispute.
The relationship, where it still has value. A contractor you may want to use again, a consultant you rely on, a supply chain that talks to itself.
Delay to other outcomes. A dispute can hold up a final certificate, a retention release, a sale or a refinancing, and those costs accrue quietly.
What strengthens a position
Evidence, chiefly. A well assembled account with each item traced to a document settles closer to its face value than the same claim asserted, because the other side can see what they are arguing against.
Having removed the weak items. A claim carrying obvious make weights invites the other party to treat all of it as inflated, and they will usually be right about some of it.
Credibility built during the job. A party that valued change monthly and raised issues at the time is believed on the items that are contested. One that produced nothing for eighteen months is not.
Willingness to proceed. A party that is genuinely prepared to adjudicate settles better than one that is not, which is why the arithmetic has to be done honestly rather than optimistically.
Timing
The best settlement is usually available early, before both sides have spent money and taken public positions. Costs incurred are sunk, but they change behaviour: parties become reluctant to settle below what they have already spent.
The second best moment is immediately after a clear analytical finding, when one party has learned something that changes their view. That window closes as positions harden again.
The worst moment is on the steps of a hearing, where the settlement is usually similar to the one available months earlier, minus everything spent since.
Mediation and the middle routes
Between negotiation and adjudication sit several options: a without prejudice meeting between senior people, mediation, or expert determination on a discrete quantum question.
Each is cheaper than a formal process and each requires both parties to want a resolution. Where one party is using delay as a strategy, none of them work and that should be recognised rather than persisted with.
The characteristics of adjudication, including the cost position, are covered in adjudication, what it is and what it costs.
The honest recommendation
Sometimes the answer is to settle below expectation, and saying so is the job. An adviser who recommends pursuing every claim to its maximum is producing fees rather than advice.
Equally, sometimes a party is being pushed towards a poor settlement by pressure rather than by the merits, and saying that is the same job in the other direction.
What both require is that the assessment is independent of what the instructing party hoped to hear, which is set out under commercially contentious.
What this means for you
Do the arithmetic before you take a position. Likely outcome, cost to get there, and the value of what the process consumes. That calculation frequently answers the question on its own.
Then revisit it whenever something material changes. A position adopted in month one and defended out of consistency in month twelve is the most expensive way to reach the same settlement. Our approach sits under final accounts and disputes.
Deciding whether to settle or push on?
Send the position as it stands. We will set out the range and what each route is likely to cost you.