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LITIGATION PROCESS
Receiving a settlement offer — or waiting to hear whether the other side will engage at all — is one of the most uncertain moments in a professional negligence claim. You may be wondering whether to accept, whether to push for more, or whether the whole process is about to drag you into a courtroom.
The reality is that the overwhelming majority of professional negligence claims in Australia resolve through negotiation, not through a trial. Understanding how that process works — and having the right legal team managing it — makes an enormous difference to the outcome.
UNDERSTANDING SETTLEMENT
A settlement is a legally binding agreement between you and the person or organisation you are claiming against — usually their professional indemnity insurer — to resolve the claim for an agreed sum of compensation, without a court making a final determination.
Settling a claim is not a sign of weakness, and it is not an admission that your case was uncertain. In many professional negligence matters, settlement is the most efficient, least stressful, and financially sound way to achieve proper compensation for the harm you have suffered.
TIMING
Negotiations do not follow a single fixed timetable. There are two main windows at which most professional negligence matters resolve.
Once your legal team has investigated the claim and gathered the necessary evidence, the first formal step is usually a letter of demand. This letter puts the professional — or more precisely, their professional indemnity insurer — on notice of the claim, sets out the legal basis, and states what is being sought.
A meaningful number of professional negligence matters settle at this stage, before proceedings are ever filed. Insurers with an experienced legal team on the other side often prefer to assess the claim and negotiate early, before the costs of litigation escalate for both parties.
When a matter is not resolved pre-litigation, proceedings are commenced in the relevant court — typically the Supreme Court of the relevant state, or the Federal Court of Australia for certain matters. Even at this stage, settlement negotiations continue alongside the litigation.
The exchange of evidence, the filing of expert reports, and court-ordered mediation all create natural pressure points at which the other side re-evaluates its position. The vast majority of professional negligence matters that reach the litigation stage still settle before a final hearing.
THE PROCESS
Your legal team handles negotiations on your behalf. You do not communicate directly with the professional or their insurer. This matters — insurers are experienced, commercially minded negotiators, and having specialist representation ensures the process is conducted on equal terms.
Most settlement discussions occur under the without prejudice rule. In plain English, this means that offers made and discussions held during negotiations cannot generally be tendered as evidence if the matter proceeds to trial. The rule exists to encourage frank and genuine settlement discussions, and is given statutory footing under section 131 of the Evidence Act 1995 (Cth).
The process typically involves each side making and responding to formal offers, with your legal team advising you throughout on whether offers are reasonable — relative to the strength of the evidence and the likely range of outcomes at trial.
IMPORTANT — KNOW BEFORE YOU RESPOND
A Calderbank offer is a specific type of settlement offer that carries real legal and financial consequences — and one you should never respond to without specialist advice.
The rules around cost consequences vary between states and court jurisdictions — another reason to obtain proper guidance before deciding how to respond.
COURT-ORDERED PROCESS
Most Australian courts now require parties in professional negligence proceedings to attend a formal mediation before the matter can proceed to trial. Mediation is a structured, confidential process in which an independent mediator facilitates discussion between the parties with the aim of reaching an agreed resolution.
The mediator does not decide anything. They make no findings, and they have no power to impose an outcome. Their role is to help both sides communicate, identify where there is common ground, and work through the obstacles to settlement.
Mediation tends to be one of the most productive stages of a professional negligence matter. By the time it occurs, both sides have usually exchanged evidence and expert reports — which means each side has a much clearer picture of the strengths and weaknesses of the claim. This often leads to genuine and focused negotiations on the day.
CRITICAL DECISION
This is one of the most consequential decisions in a professional negligence claim, and it depends entirely on the specific facts of your situation.
Accepting too early can significantly undervalue your claim
Before evidence has been fully developed or expert reports have been obtained, the other side has little incentive to offer full value. Settling at this stage may leave you substantially out of pocket compared to what your claim is genuinely worth.
Rejecting a reasonable offer carries its own risks
Proceeding to trial involves real cost and time implications, and outcomes are never guaranteed. If the court awards less than a prior offer — particularly a Calderbank offer — the financial consequences can be significant.
The right answer depends on your evidence, not your emotions
The strength of your evidence, the amount offered relative to your actual loss, and the realistic range of outcomes at trial are what drive the decision — not frustration, principle, or a sense of what feels fair.
Fair Go Australia’s team provides clear, honest advice on whether an offer reflects the genuine value of your claim — before you make a decision you cannot reverse. Depending on your circumstances, that advice may be to accept, to counter, or to push the matter forward.
IF AGREEMENT IS NOT REACHED
If settlement is not reached through negotiation or mediation, the matter proceeds toward a final hearing. That is not a failure of the process — some professional negligence claims are genuinely contested on the facts or the law, and a court determination is the appropriate outcome.
Fair Go Australia’s legal team is fully prepared to take matters to trial when that is in your best interest. The decision to litigate through to a final hearing is made with your input, with a clear assessment of the evidence, and with a realistic understanding of what the process involves.
Act before time runs out
Professional negligence claims must generally be commenced within a set limitation period — in most states, this is three years from the date you became aware (or reasonably should have become aware) of the negligence, though this varies by state and claim type. Missing this deadline can permanently extinguish your right to claim. If you are unsure whether your limitation period is still open, contact our team for a free assessment as soon as possible.
GET SPECIALIST ADVICE
Deciding whether to accept or reject a settlement offer is not something to do alone. The right response depends on the strength of your evidence, the likely range of outcomes at trial, and an honest assessment of what the offer is actually worth relative to your loss.
Fair Go Australia’s specialist professional negligence team reviews the offer, the evidence, and the realistic outcomes — then gives you straightforward advice. No obligation, no surprises. If your claim succeeds, our fee comes from the settlement. If it doesn’t, you pay nothing.
We respond to all enquiries within 1 business day.
COMMON QUESTIONS
Yes. The majority of professional negligence claims in Australia resolve through negotiation or mediation rather than proceeding to a final trial. Many settle before proceedings are even filed. Going to court is the exception — though when it is necessary, it remains an option your legal team should be fully prepared to pursue.
A Calderbank offer is a formal offer to settle made ‘without prejudice save as to costs.’ If you reject the offer and then recover less at trial than was offered, the court may order you to pay the other side’s legal costs from the date of the offer. It is essential to obtain specialist advice before responding to any Calderbank offer.
Technically you can, but it is strongly inadvisable in a professional negligence matter. The counterparty is typically a professional indemnity insurer with experienced legal representation. Negotiating without specialist advice significantly increases the risk of accepting an amount that is well below the true value of your claim.
This varies considerably. Pre-litigation negotiations following a letter of demand may resolve within weeks or a few months. Where proceedings have been filed and mediation is required, the process typically takes longer — often six to eighteen months from the filing of proceedings, depending on the complexity of the claim and the relevant court’s timetable. Your legal team should keep you informed throughout.
If the matter goes to trial and the court awards you less than a settlement offer that was previously made — particularly a Calderbank offer — there may be adverse cost consequences. This is one of the key reasons why specialist legal advice before rejecting any offer is critical, not optional.
LITIGATION PROCESS SERIES
Our goal is to help people in the best way possible. this is a basic principle in every case and cause for success. contact us today for a free consultation.
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