Being Sued

2. Admitting Liability

If you are in the wrong, it is usually best to admit it, after checking with any interested parties, such as your insurers.

Even if you could use procedural rules to delay final judgment, you are likely to end up paying the claim - and the costs of the case.

2.1 You can agree to pay the full amount.

• If you admit liability within 14 days in a claim for a specified amount, court costs will be a relatively small fixed amount.
• If the claimant did not allow you a reasonable opportunity to investigate and settle the claim before issuing proceedings, you may be able to make the claimant pay the court costs.

2.2 You may be able to pay by instalments if the claimant - or the court - agrees.

Your offer must state how much each instalment will be and when the instalments will be paid.

• If you miss any payments, you may be required to pay in full.

2.3 You can admit liability but make a counterclaim.

• For example, a customer might sue you for non-payment of an invoice for goods supplied, but you may wish to counterclaim for losses caused to you because the goods were defective.

2.4 You can make a reasonable offer.

• Calculating a reasonable offer of settlement in a purely financial claim (eg for breach of contract) is relatively straightforward.
• Compensation for personal injuries is based on previous awards. Professional advice on current rates is essential.
• Unless the claimant agrees to accept the offer (or an improved offer) before or at the hearing, you will have to defend the case. If the claimant later wins the amount you offered, or less, the claimant will have to pay some of your costs, provided you have paid the amount of your offer into court.

2.5 Any negotiations you conduct which are intended to put an end to the proceedings are not admissible as evidence in court. For clarity, state that the negotiations are conducted 'without prejudice'.

• State this at the beginning of any conversation or any correspondence with the claimant or the claimant's advisers.