Let’s Talk Settlement

| May 4, 2020 | arbitration, Civil Litigation, Settlement |

Virtually every legal matter or case involves discussion of settlement. In litigation, it is almost assured that parties have opposite perspectives on and interests in the resolution of a case. Litigation is usually commenced because at least one party is willing to place the dispute before a judge or jury for a final decision if a settlement cannot be reached beforehand.

In deciding whether to settle a case and on what terms, one should consider the ultimate alternative to a settlement: trial. Going to trial means incurring more costs, more preparation time and work time, the uncertainty of rulings by the judge regarding evidence and witness testimony, and, ultimately, the uncertainty of a jury’s verdict. Weighing these risk factors in your case should sharpen your decision as to whether to settle and on what terms. Note that in some situations there may be an arbitration agreement which could prevent the case from proceeding in court and to a trial.

One key benefit of consulting with an experienced attorney is that you receive an assessment of the relevant pros and cons of your case and the relative likelihood of a positive result. Attorneys have access to jury verdict and settlement information and can even contact colleagues to discuss their experiences in cases such as yours. Attorneys with trial experience can explain the litigation process so you have a better idea as to what it entails. If you are contemplating undertaking legal action, the best time to consult with an attorney is before you file your claim or lawsuit.

While there is nothing inherently wrong with fighting a case on principle, it can cost a lot of money to do so. It is unrealistic to expect a lawyer or her firm to expend money or its time and resources to fight a battle just on principle. Practicing law is a business and if lawyers took too many cases on principle without the client taking stake in the case (i.e. advancing money to be used to handle the case) lawyers would go out of business. Moreover, how many people are actually willing to spend their time and money trying to prove a point? From a legal standpoint, the Bar association in most states (North Carolina is one of these states) requires the client, not the lawyer, be financially responsible for all costs incurred in handling a case.

Settlement can occur at any time even in the midst of trial. In most cases the court will order the parties to participate in mediation while in other cases court rules require the parties to engage in arbitration. Settlement is a preferred alternative to the relative uncertainty of a trial result. If the parties reach a settlement, it provides the freedom to discuss and decide on terms such as payment amount, duration of payments, security interest/collateral, confidentiality provisions, tax implications and structuring of the settlement, secondary considerations (ex: apology letter, changes to one’s credit report) and remedies for breach of the settlement agreement.

Before a lawsuit is filed and definitely after filing be sure to engage in a meaningful review of the issues in your case and seriously explore the prospects for settlement. It may be the best result for you. Consult an experienced attorney if necessary.