A sports club had sold part of its land to a developer in return for the construction of a new clubhouse on the organisation’s remaining land.
As construction costs over-ran, the developer stopped work and refused to resume until additional funds were provided by the sports club. This resulted in a stand-off that saw lawyers instructed by both sides.
The case got stuck for over 12 months in a legal process that made little headway, other than to highlight weaknesses in the contract that meant each side had some form of potential argument with which to attack the other.
The case had amassed over £50,000 in legal costs before it stalled when the sports club exhausted its fighting fund. Their incumbent lawyer (a national firm) was uncomfortable in offering a conditional agreement and was not prepared to cover disbursements. It was also unlikely that the case would have been able to get ‘after the event’ insurance for the adverse costs at a commercially viable level.
The sports club’s accountant recommended that it transfer the case to Escalate, and we agreed a heads of terms settlement within just six weeks. Dragging the case away from the lawyers and moving the discussions on from the respective legal merits was a key factor here, with negotiations held directly between the Escalate corporate recovery professional and the developer. The fact that, via Escalate, the club was able to demonstrate that the case was funded to the High Court meant that the developer needed to agree to a deal or risk a significant gamble through the court system.
Execution of this settlement was not straightforward as it required new contracts to be drafted. The client was given a choice of lawyers to undertake this work, but chose to use the Escalate panel instead. The case has concluded, clubhouse built and settlement completed in full.
Armstrong Watson has been given the rights to use this case study by Escalate, an award-winning, accountancy-led commercial dispute resolution service.