Embroiled in a Lawsuit? 5 Things to Consider for Negotiating a Legal Settlement

According to the American Bar Association, relatively few lawsuits ever go all the way to trial. Most parties to civil (non-criminal) cases are settled long before trial. Once a suit is filed, the legal process itself can help opposing parties understand the strengths of their respective positions, often facilitating a settlement.

Here are five things parties to a lawsuit should consider about negotiating a settlement:

Define Liability

Contrary to popular belief, settling a legal matter usually does not require either party to admit right or wrong. A settlement can define a new relationship between the parties by specifying their new responsibilities or just reaffirm old ones.

Define Issues

In a legal complaint, lawyers list all legal theories of why a defendant is liable to the plaintiff. It not only can create confusion, but this practice tends to raise emotions. A settlement can resolve some of the less important issues while leaving other issues to be heard by the judge or a jury.

Reduce Expenses

Many legal professionals will agree that settling a legal dispute can be far less expensive than litigation. A lawsuit involves pleadings, motions, discovery, pre-trial hearings, status conferences, case evaluations, jury selection, trial preparation, a trial, post-trial, motions, appeals, etc. Time, and financial commitments, as well as risk of financial exposure, act as great motivators for negotiating a settlement.

Manage Risk

When parties to a lawsuit reach a settlement, they are controlling the outcome of a dispute. This reduces their risk of having a third-party, such as a judge or jury, decide the outcome and terms of a dispute.

Negotiate Settlement

Known as a “strategic default” among some legal circles, parties can often negotiate settlement terms more favorable to them than those terms and provisions found in an original agreement.

It’s often said that a good settlement is reached when both parties leave the negotiation table a little unhappy. Negotiating a reasonable settlement takes time and patience and is influenced by at least one of the above-listed factors.


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