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What is a Lawsuit Settlement?

A lawsuit settlement is an alternative to litigation and a trial.  It amounts to a resolution between the two parties in a pending court case.  A lawsuit settlement may occur when the defendant agrees to meet all or some of the claims brought forth by the plaintiff, thereby settling the matter before it goes to court.  Typically, the settlement includes some sort of monetary reparation being paid to the plaintiff.

Once a formal claim or lawsuit is filed, the case is put on track to go to trial.  If both the plaintiff and the defendant feel strongly that they are in the right, the case may go to court and a final judgment will be rendered. However, if both parties are willing to negotiate before this final verdict is handed down, the case may end in settlement.  A large number of civil cases are settled before they go to trial.

Settlement is a process.  Typically, the easiest time to settle a dispute is before the lawsuit is filed.  However, there are many opportunities for settlement throughout the trial process.  Legal counsel for each party remains in contact throughout the discovery process leading up to the trial.  This discovery process allows each party to determine the strengths and weaknesses of the case.  Depending upon this assessment, one or both sides may ask for a settlement in lieu of bringing the case to trial.  If the case is settled then litigation comes to an end.

Reasons for Settlement

Depending on the details of a case, legal counsel may recommend their client ask for a settlement before the case goes to trial.  A desire to settle may be based upon the following factors:

  • The primary reason for a settlement resolution is the strength of the facts presented in the case. If the facts clearly favor one side or the other, there is little need to pursue a trial.
  • A desire for a timely resolution: A trial, and the possibility of subsequent appeals, may take years before reaching final resolution.
  • Emotional protection: A trial is stressful for the plaintiff and the defendant.  Based on the details of the case, it may be prudent to settle out of court to protect either or both parties from the rigors of a formal trial.
  • Privacy: A settlement can be structured to keep the resolution private, whereas any case that goes to court becomes a matter of public record.  The release of personal and financial information in a public trial may result in harmful repercussions to one or both parties involved in the trial.
  • Liability: If a defendant loses the trial, he or she is proven liable for the plaintiff’s claims.  In a settlement situation, there is no need to admit liability.
  • Another significant motivating factor behind many settlements is the cost of litigation and trials. Both sides in a lawsuit will usually pay tens of thousands of dollars, often much more, in preparing their cases for trial; in hiring expert witnesses, deposing doctors and other witnesses (which often requires travel), preparing exhibits for trial, and other costly efforts to build and present the best case possible.  While individual plaintiffs generally do not have to pay this money up front (it is advanced by their lawyers), it usually is reimbursed to their attorneys at the time of settlement or, if the case goes to trial, at the time a judgment is recovered.  Defendants (or their insurance companies) have the same expenses, plus they are usually paying attorneys by the hour throughout the case.  These dollars add up for both sides, and settlement, particularly early settlement, is a way to avoid some or much of this extra cost.

Whether you take your claim to court, or choose to settle, it is imperative to have trusted legal counsel to guide you through the process. Protzman Law has the experience, skills and resources to help clients determine the most appropriate course of action when making a legal claim. Call us at 816.421.5100 or contact us here to begin the conversation.

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