Knowing When to Settle

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If you believed what you saw on TV, you would think that all legal cases went to court, where angry attorneys fought it out in front of a grumpy judge and a colorful jury. In reality, however, many cases are settled out of court, without ever going to trial. In fact, this is a preferable arrangement in many situations. But how can you know when a settlement is the right choice?

Why we’re asking

Misunderstandings about the legal profession and what it entails have given tons of potential clients the wrong idea about how it works. When you hear about somebody “settling out of court,” it is often portrayed as a bad thing, but the fact is that settling is often a better option. To find out more, we’re turning to our legal professionals, to find out what they look for in a settlement to ensure that clients are getting what they deserve.

What do you look for in a settlement deal?

How often do your cases end in settlements?

If you could choose, which would you do more frequently–settle, or go to trial?

What advantages does settling have over going to trial?

What common misconceptions about settlements irritate you the most?

Please post your answers in the comment field below!

5 COMMENTS

  1. Settlement occurs for several reasons. A settlement may be reached because a defendant realizes that settling a case will be less expensive than going to trial.

    Also plaintiff may be encouraged to settle a case for less than it is worth because the defendant does not have the financial ability to pay a judgment. In fact a judgment may force the defendant into bankruptcy leaving plaintiff with nothing.

    A settlement is possible when both plaintiff and defendant realize that hey have imperfect cases. The plaintiff’s case isn’t as strong as once thought and the defendant realizes that the defenses are no longer a slam dunk. Solution – negotiate a settlement.

    Also settlement often occurs when one party or both parties tire of the litigation. Given the docket backlog, cases can languish in the courts for years while the legal costs mount.

    Settlement can also be encouraged by the history of particular trial judge or a jury in a geographic area. Hence the term forum shopping!

    A settlement removes the risk of an adverse outcome. By going to trial one is rolling the dice.
    A settlement provides a guaranteed outcome.

    In some cases the parties may be so intransigent that the case must go to trial. I tried a personal injury case to a jury where the defendant (insurance company offered $5,000 against $25,000 in medical bills. The trial judge suggested the case settle for $00,000. The insurance company increased its offer from $5,000 to $7,000. The case went to trial and the jury returned a verdict of $210,000!

    How often do my cases end in settlements? 95%

  2. A good settlement should cover all medical bills, all legal fees, all costs, contingent bills. lien repayments, and have a sufficient amount left over for the client to compensate for the pain and suffering endured during recovery, or if there is no recovery, for a lifetime of disability.
    What many people fail to realize is that settlements are often limited by the amount of insurance available to the responsible party. Most people are unable to pay beyond their policy and choose to file bankruptcy rather than pay a huge award.
    This is why uninsured and underinsured coverage you can buy to protect yourself is so important to have.
    The majority of cases settle. Those that don’t, and go to trial have about a 50% success rate. Jurors are harsh, and unsympathetic to those who bring lawsuits. Always think twice before proceeding to trial if you have a decent offer on the table.
    Settling means you know what your award is. Your fate is not left in the hands of strangers.
    Common misconceptions are that bad cases are filed just “to settle for something.” Not true. Bad cases go to trial, and are routinely lost.
    Another misconception: Only greedy people file lawsuits. Again, not true. Insurance companies routinely deny legitimate claims hoping that the claimant will give up and not retain a layer. Many people do just that.
    Another misconception: Lawsuits are bad for the economy. Not true. Because of lawsuits we all drive safer cars, live in safer homes and shop in safer environments. Lawsuits perform a social function of bringing hazards to light and forcing businesses to change the way they do business. A safer world means fewer injured people, which equates to a larger work force, which equates to a stronger economy.
    The bottom line: file your case if you think you can win, and settle if you can get a decent offer. No one ever loses a settlement, but trials are lost every day.

  3. A good settlement should cover all medical bills, all legal fees, all costs, contingent bills. lien repayments, and have a sufficient amount left over for the client to compensate for the pain and suffering endured during recovery, or if there is no recovery, for a lifetime of disability.
    What many people fail to realize is that settlements are often limited by the amount of insurance available to the responsible party. Most people are unable to pay beyond their policy and choose to file bankruptcy rather than pay a huge award.
    This is why uninsured and underinsured coverage you can buy to protect yourself is so important to have.
    The majority of cases settle. Those that don’t, and go to trial have about a 50% success rate. Jurors are harsh, and unsympathetic to those who bring lawsuits. Always think twice before proceeding to trial if you have a decent offer on the table.
    Settling means you know what your award is. Your fate is not left in the hands of strangers.
    Common misconceptions are that bad cases are filed just “to settle for something.” Not true. Bad cases go to trial, and are routinely lost.
    Another misconception: Only greedy people file lawsuits. Again, not true. Insurance companies routinely deny legitimate claims hoping that the claimant will give up and not retain a lawyer. Many people do just that.
    Another misconception: Lawsuits are bad for the economy. Not true. Because of lawsuits, we all drive safer cars, live in safer homes, and shop in safer environments. Lawsuits perform a social function of bringing hazards to light, and forcing businesses to change the way they do business. A safer world means fewer injured people, which equates to a larger work force, which equates to a stronger economy.
    The bottom line: file your case if you think you can win, and settle if you can get a decent offer. No one ever loses a settlement, but trials are lost every day.

  4. 95% of my cases settle before trial.

    To me it doesn’t matter if we settle or to trial, as long as the client walks away satisfied with how the case was handled.

    As I explain to all of my clients there is a formula to settlement that combines time and money. Is the settlement worth money now or do you want to spend more money to try to get more money down the road. It’s a gamble with going to court, you never know how your case may turn, settlement allows you to hedge those risks.

    Most clients think settlement is quitting. They fail to realize settlement is about making good business decisions. Is less money now worth more than money in the future that you will have to pay upfront to get? Is a payment plan better than taking less one lump settlement? These are tough questions, but many times at the end of negotiations, you should be close to what you are owed.

  5. There are settlements and settlements. In civil litigation, the “joke” goes that a good settlement is one where both parties are equally unhappy.” That may well work if the parties have no relationship and the settlement need the unpleasant temporary one they have–the lawsuit.

    But in many situations that is not the case. In businesses it is now well understood that negotiation is “not a competitive sport” and that no one “wins when there is a ruined business relationship. They understands that there can (and probably should) be negotiations where interests other then dollars are st stake ,and the resolution can include non monetary factors.

    So a “good settlement” in such a scenario is one where both parties are equally satisfied–and the flames of battle will not erupt in days weeks or months… often never to end.

    Then ther is dkivorce, where that is true–ad rthyer are chilodren that toes th4e fueig partes togher and gtake the brit of any fighting,

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