Comparing the Advantages and Disadvantages of Out of Court Settlement

Introduction

Following separation, parties have different pathways which they can undertake to reach a resolution of their property and/or parenting matters without entering a courtroom.

Most cases do settle out of Court and without the requirement for litigation. However, in some cases, a lawsuit cannot be avoided and the need to approach the Court for a resolution is imperative.

Each case differs and there are advantages and disadvantages with respect to securing an out-of-Court settlement which we address further below. There are also different methods that parties generally adopt in the hope of securing an out of Court settlement which we outline below.

There are many advantages of an out of court settlement. If you’re looking to  commence lawyer-assisted mediation, please reach out to our team of expert lawyers who can assist you with the process.

Advantages

1. Less expensive than litigation
2. Faster alternative to a court hearing
3. Less of an emotional toll
4. Parties have control of the process

Disadvantages

1. Lack of urgency if there is a risk of safety
2. In some cases, there can be an uneven bargaining power
3. No orders to obtain the opinion of experts

Negotiation Methods to Reach an Out of Court Settlement

There are several alternative dispute resolution methods which can be adopted to strike an out of Court settlement which we detail further below:

Direct private negotiations

Direct private negotiations are helpful, as the parties control the scope and time-limits of the negotiations. At times, parties choose to undertake settlement negotiations privately, while having the benefit of the advice of their lawyer in the background to assist them with identifying the key points of the negotiations and with steering the negotiations in a favourable direction.

Lawyer-assisted mediation

Lawyer assisted mediation is a favourable approach. Parties are able to attend mediation with their lawyers to negotiate an out of Court settlement of their property and/or parenting matters. This is an attractive option because each party is able to obtain advice from their lawyer in the course of the negotiation with respect to their rights and entitlements.

Lawyer assisted mediation can occur by way of shuttle mediation (which means both parties remain in separate rooms and the mediator will generally go back and forth between the parties with the aim of assisting the parties to reach a compromise position and ultimately an out of Court settlement).

Lawyer-assisted mediation can also occur with all the parties in the same room, if appropriate.

Child-inclusive mediation

Parties are also able to nominate to engage in child inclusive mediation involving their children if they wish to explore any appropriate out of Court settlement that can be reached in relation to parenting matters.

Advantages of Out of Court Settlements

There are several advantages associated with reaching an out of Court settlement, which we outline below:

1. Costs – generally, parties who are able to resolve their matter without the need to resort to litigation are able to save on courtroom costs and any other legal fees and expenses associated with litigation, including the costs of calling on expert witnesses.
2. Time – The Court system is generally overburdened and involves delays, therefore, the progression of matters are generally slow in comparison to reaching an out of Court settlement. It generally can take up to two years to reach final hearing in the Court system in some cases. Therefore, reaching an out of Court settlement is favourable as it helps parties resolve the issues in a short time and avoid protracted legal battles.
3. Emotional aspect – It is no secret that litigation, results in creating heightened stress and anxiety for some. Therefore, the advantage of reaching an out of Court settlement also relates to salvaging the emotional toll that litigation can have on parties and their family members, especially, children.
4. Control – reaching an out of Court settlement is favourable because the parties have control over the process and agreement, keeping the matter private, whereas, in Court, parties have no option but to accept the orders made by the Court.

Disadvantages of Out of Court Settlements

At times, an out of Court settlement is not appropriate. By way of example:

1. Urgency – some cases involve urgency, such as in cases involving elements of risk to the safety and wellbeing of children or a party, or a dissipation of assets. In such cases, an out of Court settlement or agreement is neither appropriate nor favourable.
2. Bargaining power of parties – generally, parties of a relationship have un-even bargaining power. One party might feel more inclined to accept an unfavourable settlement to keep the peace.
3. Matter generally – The Court generally makes several enquiries to satisfy itself prior to orders being made, by way of example, the Court might make orders for the parties to obtain the opinion of experts to ensure that the orders that are made are appropriate in the circumstances. This generally is not sought in out of Court settlements which may lead to one party being disadvantaged in the process.

Things to Consider

Although there are several advantages associated with reaching an out of Court settlement, it is always important to remain appraised of your entitlements, rights and obligations and receive advice tailored to your particular circumstances from an experienced family lawyer to ensure that a fair outcome is reached.

Therefore, if an agreement cannot be reached out of Court, or it is inappropriate to engage in mediation, proceedings may be commenced in the Federal Circuit and Family Court of Australia.

Maximising your Settlement with Doolan Wagner Family Lawyers

Even in amicable breakups, it’s important to seek legal advice when considering an out of Court settlement from an experienced family lawyer.

Our family law specialists will ensure that your settlement is completed efficiently and according to the law, to ensure that you receive your entitlements in any out of Court settlement.

Doolan Wagner Family Lawyers offer specialist family law advice and are based in St Leonards on Sydney’s North Shore.  If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or send us an email at enquiries@familylawyersdw.com.au to discuss your matter in complete confidence.  We have a dedicated team of experienced family lawyers to handle your matter effectively and efficiently, providing you with reliable, direct and practical advice.

About the Authors:

Lisa Wagner is Managing Director and Principal of Doolan Wagner Family Lawyers. Lisa is an Accredited Family Law specialist holding honours degrees in economics and law. She is also a Collaboratively trained Family Lawyer, a Family Dispute Resolution Practitioner, and a Parenting Coordinator. Lisa has over 30 years’ experience as a specialist family lawyer, experienced litigator and skilful negotiator in all family law matters; working for the majority of that time in Sydney’s CBD as well as on Sydney’s lower North Shore and Northern Beaches.

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Sara Arnold is a Senior Associate at Doolan Wagner Family Lawyers. Sara holds a Bachelor of Laws and a Bachelor of Business Management as well as recently completing her Master of Applied Law (Family Law).

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Disclaimer:

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.