Monday, 16 September 2013

DON'T COURT DISASTER : FORFEIT PRIDE AND AVOID THE FALL........ ( Article by Professor Hu Chi Ku Chi )

Any small club with limited assets and unlimited liability status should take always listen to this simple piece of advice :  " don't court disaster ".  Indeed, such words of wisdom have been embraced by many multi-million pound companies , which not only can afford the top notch lawyers , but they also have the financial resources to take a dispute all the way to the highest court in the land. 
So I asked a friend of mine why his international hotel group paid out £4000 to a woman who slipped on a dance floor and broke her ankle , when she was wearing ridiculously high heels and was pissed as a newt.  The answer , as he saw it , was based on common sense and good practice  : " The company have a policy to always pay out on all minor claims . " 
" Why was that ? " I asked, fully aware that contributory negligence on her part must surely be 80% or more. The reasons he gave me to support this seemingly defeatist policy produced both a convincing argument , and powerful justification , for such a generous pay out. For the hotel there would be massive savings with regards to :
1. Staff not wasting their time and effort on legal matters, such as gathering information , witness statements , holding countless meetings, preparing and reading documents generated by the never ending communication with solicitors 
2. No lawyers' fees to pay out   
3. No court costs involved 
4. No likelihood of being required to fork out a higher damages award 
5. No adverse publicity, which might well undermine the company's future revenue prospects

Once the claim comes in , no matter how spurious , contentious or unjust ,  common sense and financial prudence screams out to implement a damage limitation strategy. This in turn means no attempt to contest the claim , but to make an immediate generous offer and pay over the money. 
So yes , if any small organisation wants to throw itself off the cliff edge into the sea of financial ruin then by all means go ahead have your day in court.......   

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