Separate the other side legal bill from your assessed costs exposure

A large number can dominate the conversation

The other party says it has spent a substantial amount on lawyers and will make you pay it all. Send the complete communication to your own lawyer. Ask what the figure represents and how it relates to your actual exposure. Do not treat an opponent's statement of spending as a court order or a complete assessment of the costs position.

Identify the document and stage

Imagine a supplier receiving a letter during a dispute that quotes legal fees already incurred. Record whether proceedings are underway and provide any existing orders or offers to the adviser. Keep the claimed amount separate from the principal debt. A costs estimate, a settlement demand and an actual costs order are different documents and should not be described interchangeably.

Consider expense without accepting the threat

business.gov.au advises businesses to weigh the time and cost of legal debt recovery. Ask the lawyer to explain the relevant costs risks in the actual forum and circumstances. The opponent's number may be worth investigating, but it does not replace advice on the applicable process, possible outcomes and what the business may need to spend itself.

Source: business.gov.au: What to do when you haven't been paid

Use separate figures in the decision

In the supplier's example, management needs to distinguish its own remaining legal budget, the amount claimed by the opponent and the advised range of possible exposure. Keep assumptions and uncertainties clear. Avoid adding every quoted figure together as though all must inevitably be paid, or ignoring potential adverse costs because the business believes strongly in its underlying claim.

Ask for the evidence needed

Let the lawyer advise whether a breakdown or other clarification should be sought and how to respond. Preserve any conditions attached to a proposed settlement. Do not make a rushed admission about costs merely to stop an alarming conversation. If a response date matters, have it checked promptly while the amount and legal basis are being assessed.

Record the commercial decision accurately

Use the advice to compare the available options, including further spending and settlement terms. Keep the reasons and approved instruction. A measured costs decision recognises real risk without allowing the other side's headline legal bill to become an unquestioned statement of what your business must ultimately pay.