On Settling a Lawsuit

February 12, 2014

So you find yourself in a lawsuit. You sued someone, or you got sued; it really doesn’t matter. You’re spending money or, if you’re involved as an injured party in a suit for damages, you await compensation for your injuries. Regardless, you’re stuck in a time-consuming and less-than-pleasant process that may be costing you lots of money, and there is no certainty about the outcome. Maybe you’ll win, maybe you won’t; and, even if you win, you could really lose, given the money you’ve spent, the time you’ve wasted and the opportunities you’ve lost. All in all, not a good situation!

Lawsuits cannot always be avoided, but opportunities to resolve them without a trial are always present. Federal and state courts provide vehicles for forcing litigants into mediation, where a reputable third party—a judge or someone skilled in mediating disputes—uses his or her skills to help the parties reach common ground. The mediator or settlement judge cannot force a settlement, but he or she can force the parties to engage in the process. Not every case will settle, but the opportunity to settle is always present, so long as the litigants are willing to consider risk, cost and time. Similar opportunities to settle before a suit is filed are also present.

After more than 32 years of litigating and settling cases, I find the attorney-client relationship most severely tested when we discuss a possible settlement. “Whose side are you on?” “She’s not getting anything from me until some judge forces me to pay.” “Are you scared about trying my case?” I’ve heard all of these comments, and more, and often in the same conversation that includes questions like:  “Why is this costing so much?” “When will this be over?” and “Can’t we get a continuance; I really want to join my family for our vacation?”

Your attorney is on your side, but he or she would be a lousy advocate if the issue of settlement was not explored thoroughly. The settlement process provides several advantages. First, a settled case is a case that ends the monthly billing cycle for you. (The corollary, often lost, is the fact that an unsettled case usually generates more fees for your attorney.) Second, every case—and I mean every one—has its flaws! Rare is the case that isn’t better settled and resolved now. Third, in cases that may not only be about money, a settlement lets the parties fashion an outcome that the court may not be able to offer in an all or nothing trial. Finally, even when the settlement process does not result in a settlement, you and your attorney will surely gain insights into the other side’s case and you’ll often get a “free look” at what an experienced decision-maker thinks about yours.

Before he went to work for the federal government in 1861, Abraham Lincoln was a very accomplished attorney. He also wrote a little about a variety of subjects, including the art of lawyering. About resolving disputes, he offered the following thoughts:

Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser—in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.

Interesting, in these words, is the fact that some 150 years ago, people involved with the litigation process were concerned about the same issues:  cost, time, and energy! There was no professional class of mediators in the 19th century, and court rules did not mandate participation in settlement conferences, but the rationale for resolving disputes without having a judge or jury impose a resolution on the parties was present then, just as it is now.

Ah, but what about emotions? Lawsuits are not simply about money; they also involve righting wrongs and vindication. Sure, and attorneys appreciate the emotional aspects of your litigation experience! Not getting “your day in court” can be a very unsatisfactory outcome. In some cases, a trial may be necessary and appropriate, and forcing a settlement may simply delay the day of reckoning, when all of the upset and intense feelings spew forth. But, and this is important, that “day in court,” when it occurs, can also result in a very unsatisfactory and costly outcome, and that outcome may occur long after you have processed and resolved the emotional issues.

What’s the bottom-line takeaway? There are two:  First, always give the notion of settling due consideration. Second, recognize the fact that by raising the prospects for engaging in the settlement process, your attorney has focused on your best interests, and not on his or hers.

(Note:  An earlier version of this piece was published first in Caveat, the Mesch, Clark & Rothschild, P.C. newsletter I co-edit. For articles from the MCR archives, click here:  MCR Articles.)




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