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Compromise Should Be King in Contract Disputes

Any good law firm will advise its clients to compromise if possible, rather than fight their differences out in court. In one case, the High Court lamented that a relatively low value contract dispute ended up being litigated on a grand scale, resulting in legal costs bills which came to more than double the sum at stake.

A social landlord had fallen out with a contractor it employed to maintain its housing stock. It claimed that it had overpaid about £300,000 for more than 12,000 small repair jobs. There was said to be no contractual basis for the payments and the resulting litigation had a ‘long and turbulent’ history.

The Court ultimately ruled that the contractor was entitled to the money and that it would be unjust and unconscionable for the social landlord to deduct the disputed sum. The Court noted that the dispute was one which need never have been fought to the bitter end. Offers of settlement had been made and rejected by both sides and the costs involved were at least £600,000.