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When Should You Consider Settlement as a Plaintiff? As a Defendant?

Most civil lawsuits settle prior to trial. Litigation is time-consuming and expensive, and with the outcome uncertain, in most cases both parties will ultimately find it in their best interests to negotiate a settlement.

But, how do you know when to settle? How do you ensure that the settlement fully protects you or your company? When giving up your day in court, it is absolutely essential to make an informed decision.

Factors that May Counsel in Favor of Settlement

In litigation, circumstances can change in an instant. Discovery of new key evidence, more bad acts by the defendant and other factors can all quickly change the calculus involved in evaluating the costs and benefits of settlement. Generally speaking, however, the following are examples of circumstances in which it may make sense to consider the possibility of a negotiated resolution:

  • You Have Leverage. In litigation, this is typically a best-case scenario. If your chances of success at trial are high, or if you have other information that puts you at a significant advantage, you may be able to secure a settlement that fully achieves your objectives without the time and expense of trial.
  • You Have Other Priorities. As a business owner or executive, litigation is rarely a top priority. If you have matters to deal with that are more important (and create more value) than going toe-to-toe in litigation, it may be in your best interests to settle.
  • You Have Bigger Fish to Fry. Is this lawsuit just one of many? Or, do you have bigger concerns on the horizon? In these circumstances, settling (without exposing your lack of interest in the litigation to the other side) may be the most prudent course of action.
  • You Have Doubts About Trial. If you have significant doubts about your likelihood of success at trial (particularly as a defendant), settling may realistically be your only option. You will need to weigh the costs of settling from a point of weakness against the costs of litigating to an unfavorable verdict at trial.

Reasons to Continue to Progress Toward Trial

Of course, some cases go to trial, and as a party to litigation rarely do you want to focus solely on seeking a negotiated resolution. Until you reach the point of physically (or electronically) signing a settlement agreement, in most cases you will want to maintain parallel tracks of proceeding toward trial while also pursuing your settlement strategy.

This will keep the pressure on the other party and help maintain your leverage in the negotiations. In addition, if settlement negotiations break down, new evidence comes to light or your opposing party backs out of the deal at the last minute, you do not want to end up in a position where you are suddenly behind the ball with regard to presenting your case at trial.

Contact Fort Lauderdale Trial Litigation Attorney Michael L. Feinstein

Michael L. Feinstein is an experienced litigator who represents individuals and corporate clients in complex business, civil and commercial litigation. If you are facing a legal dispute in the Fort Lauderdale area and would like to discuss your case with an attorney, call (954) 767-9662 or request an initial consultation online today.