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If the matter goes for trial, the court will hear the case without being aware that you have made an offer to settle the matter. In this manner, you do not weaken your case.
If you have offered to pay $20,000 (in accordance with court procedure) and at the trial, the court orders you to pay $19,000, it means that the plaintiff ought to have accepted the $20,000 and since it had not done so, the plaintiff will have to pay your legal costs from the date you had offered made the offer. It means that the plaintiff gets $19,000 from you but it may have to pay a significant portion your legal costs which may be quite substantial (a day in court may cost each party $5,000).
But if you have offered $20,000 and the court orders you to pay $21,000 at the trial, it means that you must pay $21,000 plus the cost of the trial which may add up the plaintiff's legal costs which may amount to $8,000 (totaling to $$29,000). So you must think carefully how much you wish to offer to settle.
Offer to settle, therefore, provides an incentive for the defendant to offer some money to settle. The plaintiff has an incentive to accept a lower sum than what is claimed because if the dispute goes for trial, the outcome is uncertain and the plaintiff may end up paying legal costs to the defendant if the amount awarded by the judge is no better that the amount offered.
see a sample of an offer to settle
IN THE SUBORDINATE COURTS OF THE REPUBLIC OF SINGAPORE
DC Suit No. 12345 of 2000
BETWEEN
WONG MEI MEI
(NRIC NO. S1234220A) ..... Plaintiff
AND
LIM AH HOO
(NRIC NO. 1234574E) ..... Defendant
OFFER TO SETTLE
The Defendant offers to settle this proceeding on the following terms:
(1) Pay the Plaintiff twenty thousand dollars ($20,000) in full and final settlement of all claims in this proceeding.
(2) Pay the Plaintiff costs on the standard basis to the date of the offer.
Dated 12th day of September 2000
Solicitors for the Defendant
To:
The Plaintiffs and her solicitors
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