The former defence minister, who plans to retire from politics at the next election, is suing both her former political staffer and Mr Sharaz over a series of social media posts she says have damaged her reputation.
Mr Sharaz last month tweeted he would no longer fight the case because he could not afford to pay the legal cost associated with going to trial in July.
The case returned to the Western Australian Supreme Court on Friday before the parties' next attempt at pre-trial mediation to resolve the stoush, which is listed for May 21.
Justice Paul Tottle said he interpreted Mr Sharaz's tweet to mean that he would not contest any aspect of Senator Reynold's case going forward, including the damages bill that could be awarded against him.
Lawyer Jason MacLaurin confirmed Mr Sharaz wouldn't fight the liability of the defamation accusation but said his client may want to be heard on the assessment of damages against him.
"It has to be worked through and it remains to be seen because I cannot commit my client to say that he might not want to have something to say about damages," he said.
"'I will not fight this action anymore' does not mean that 'I will just accept an assessment of damages'."
He said Mr Sharaz may choose to wait until Senator Reynolds and Ms Higgins' trial concludes to decide if he contests the damages hearing against him.
"That would be a rational and proper position," Mr MacLaurin said.
Justice Tottle said it was "difficult to square" Mr MacLaurin's submissions about Mr Sharaz's position with his tweet in April but accepted the parties would need to continue talks to resolve the uncertainty.
Mr MacLaurin said it would be "definitely, definitely" settled by May 24 when the parties return to court for the next strategic conference.
Senator Reynolds is suing Mr Sharaz over tweets he made and a Facebook comment in 2022.
One defamatory imputation claimed against Mr Sharaz's tweets was that Senator Reynolds pressured Ms Higgins not to proceed with a genuine complaint to police about being raped in her ministerial office.
Other claimed imputations were that the senator "is a hypocrite in her advocacy for women's interests and empowerment", interfered in Bruce Lehrmann's rape trial and bullied Ms Higgins.
Senator Reynolds claims she was also defamed by Mr Sharaz's reply to a comment on her Facebook page that asked how she was still in politics having "destroyed" Ms Higgins.
The commenter added, "You're a monster who deserves to be in jail".
Mr Sharaz responded: "Thanks for reminding her. I hope she hears this every day until she dies", the senator's statement of claim says.
Lehrmann has always denied the sexual assault allegation. His trial was aborted due to juror misconduct and Ms Higgins' mental health was cited as the reason for no retrial.
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