Reasonable Approach Pays in Court

Posted: 3rd May 2011

Keeping your head (and thereby taking a reasonable approach) when all about you are losing theirs can pay dividends in court.

In a recent case involving the break-up of a limited liability partnership (LLP), a partner who had been effectively expelled by the other members made an offer to them, in open correspondence (correspondence which is not legally privileged), that they should buy out his share in the LLP at fair market value.
The offer was rejected. When the case went to court, the court ordered that the ex-partner’s share should be bought out by the other members of the partnership at fair market value.
Because he had made the offer in open correspondence, the court ruled that the ex-partner’s costs should be settled on an ‘indemnity’ basis, which means he will receive approximately 90 per cent of his costs from the losers. Normally, the winner can expect to receive about 70 per cent of their costs from the loser.
The courts generally react favourably to litigants who are shown to have tried to adopt a reasonable approach.
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