Defend or settle
- Defend: expected GBP 725,000. Settle: GBP 450,000. Difference: GBP 275,000.
- Break-even chance of winning: 85.6%.
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External Disputes and Litigation
Tracks notices, claims, cases, counsel, deadlines, court events, holds, settlement workflows and outcomes.
Demonstration: Dunmore Building Services (fictional) · Construction services. Fictional data and a scripted answer.
The situation
- Organisation
- Dunmore Building Services (fictional)
- Who is asking
- General counsel
- Industry
- Construction services
- What happened
- A client has sued over alleged defects; the claim has gone to a pre-trial stage and the board asks whether to defend or settle.
The question asked
On the lawyers' own assumptions, is it cheaper in expectation to defend this claim or to settle it?
What it reads, and who can see the result
- Counsel's merits assessment documentCounsel's view of the prospects, as a range.
- Costs estimate documentEstimated costs to trial, from the outside counsel's budget.
- Reads
- Counsel's assessment and the cost budget supplied by the general counsel.
- Does not read
- The privileged advice itself beyond the figures the general counsel chooses to enter.
- Permission
- The general counsel enters the figures; nothing is read from the case file.
- Who sees it
- The general counsel and the board's litigation committee.
Try it
Change the assumptions. Every result and the answer below are recomputed from them, and a warning appears when a result crosses a stated limit.
- Chance the claim succeeds
- 45%
- Expected cost of defending
- GBP 725,000Own costs plus the claim, weighted by the chance it succeeds.
- Cost of settling
- GBP 450,000The settlement; own costs to date are not counted here.
- Defending costs more than settling by
- GBP 275,000
- Chance of winning at which the two cost the same
- 85.6%
On these figures defending has the higher expected cost. A decision also turns on precedent, reputation and risk appetite, which are not in the arithmetic.
The answer
Simulated answer. Written for this fictional case, not produced by a live model. Only the figures in it are computed, from what you decided above.
On these assumptions, defending has an expected cost of GBP 725,000 against GBP 450,000 to settle.
The calculation weighs the claim by counsel's chance that it succeeds and adds the costs of getting to trial [S1][S2]. The two costs are equal when the chance of winning is 85.6%; the figure you chose is 55%.
The arithmetic is simple; the inputs are not. The chance of winning is a lawyer's judgement and the figure that changes the answer most, so the board should see what happens when it moves.
Relies on: S1 · Counsel's assessment (summary figures)S2 · Outside counsel budget to trial
No approval is needed for this result: it is read-only insight, and nothing consequential happens because of it.
What it produces
For the litigation committee
- Decide the risk appetite first; the numbers do not decide it.
- Ask counsel to state the range of the chance of winning, not a single figure.
Limits of this example
- Ignores the time value of money, interest on the claim and the chance of a partial award.
- Not legal advice; counsel's advice governs.
- This is a scripted demonstration on fictional data. No model was called and no real organisation, person or result is shown.
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