SIMPLIDefending a dispute costs time and money, whether the case is won or lost. A sensible policy is not to fight everything. It is to fight the cases where the expected return is greater than the cost.
A simple model
Expected net recovery is the chance of winning multiplied by the amount at stake, minus the cost of fighting. The cost includes analyst time, fees and any impact on your relationship with the customer.
Case A: €240 dispute
Case B: €25 dispute
In Case A, a strong evidence package gives a good chance of winning a meaningful amount, so fighting is clearly worthwhile. In Case B, even a reasonable chance of winning cannot cover the cost of the work, so accepting the dispute is the better decision.
What goes into the estimate
- Likelihood of winning, based on evidence completeness and past outcomes for similar cases
- Value at stake and any fees attached to the dispute
- Cost of the work, including analyst time
- Effect on dispute ratios and scheme monitoring thresholds
- Customer relationship and lifetime value
Turn it into thresholds
Once the model is set up, convert it into rules. Cases above a value and confidence threshold are prepared automatically. Low value cases with weak evidence are accepted or refunded early. Everything in between goes to a reviewer. The result is consistent decisions that do not depend on who picks up the case.
The takeaway
Fight selectively and with evidence. Expected net recovery gives teams a shared, defensible way to decide where effort should go.