Ways of Settling Litigation
It is almost proverbial that 9 out of 10 cases do not go to trial. Statistically, this seems to be fairly close to the truth in at least some federal courts and probably in many state courts too. A lawsuit can end when it is settled by agreement of the parties. Other ways of ending the lawsuit are discussed elsewhere.
A settlement can be made at any time, and can even be reached immediately after filing of the Complaint. This is somewhat rare, because neither party has yet had the benefits of the Discovery phase of the lawsuit. This is most likely to happen when the parties have an initial conference (required in most forum courts) and discover that they agree on the merits of the case. The settlement amount in this instance is often lower than the amount stated in the Complaint to reflect the savings to both parties in avoiding a trial; though there are exceptions to this when the Defendant feels pressed to resolve the litigation early for any reason.
More usually, a settlement is reached at some point during or after the Discovery phase of the litigation. During Discovery, both parties exchange information, produce documents, and obtain testimony of witnesses. Witness testimony is obtained by Deposition or by Affidavit, or by Interrogatories. Once the issues become clearer, the outcome of the litigation becomes more predictable, and it may become much easier for the parties to reach a financial result, again taking into account the savings by avoiding further litigation and trial.
During the course of the litigation, either party can usually ask the Judge for mediation. This can be conducted by the Judge, or by other court-approved persons. Sometimes this mediation is free, as when the Judge agrees to an informal mediation in the Judge’s chambers. Sometimes mediation is more costly, as when it is performed by private parties or individuals; this is more usual in corporate cases with very large amounts of money at stake. During this time, the mediator urges both parties to settle, and urgently strives to reach a settlement agreement.
There are several factors that come into play when one party wishes to force the other party into a settlement of the case. One such factor is the cost of the litigation. Assuming the parties are in approximately equal financial positions, then this should not become a factor, and yet it does become a factor when one party is spending much more than the other party is spending for the litigation.
Why would one party spend so much during litigation that it ends up running out of money? Yet this happens frequently! The answer is in the litigation strategy, and the selection of lawyers initially in the case. Some law firms are much more expensive than others. And, there are many opportunities to spend time and effort, but not all are productive or useful. We believe a wise attorney should avoid doing useless things that only serve to run up the costs to their own client.
And, some parties believe that by filing many motions or creating many disputes, that they can somehow outspend their opponents. In this situation, a clever opponent will simply minimize their own efforts and costs, to allow them to sustain the litigation.
We believe in minimizing the costs to the client. We believe that in this way the client can more readily sustain the burden of the litigation and possibly outlast the opponent. We have seen opponents nearing trial who had exhausted their resources, and were simply unable or unwilling to go further. This can represents a real victory, and a result by a very favorable settlement.
In every situation, there are unique factors that come into play. Please contact us to discuss your situation! The initial consultation is free, and there is no obligation.