Business Law | Should You Settle or Go to Trial?

Should You Settle or Go to Trial?

July 27, 2020

We’ve all seen the true crime shows – an outraged, wronged victim takes their anger and frustration to court against the perpetrator. Claims are justified, the jury decides, and the gavel comes down on their side. But are things really that clear-cut? And is litigation always the best course to take?

Real World Reflections

In reality, and based on our experience, most cases won’t see a courtroom. There are various reasons for this, but a major reason for settling is expense. If the parties can agree to settlement terms before filing the complaint, legal fees can be reduced by up to 90%. If they do file but settle before the trial ensues, they could still be looking at around a 30% reduction in legal costs. And that’s without considering that an appeal is always a possibility, spelling even more costs or savings, depending on the path chosen.

But is a reduction in costs enough of a tradeoff for your day in court? As with anything in the legal field, it depends. One key factor to keep in mind when considering a trial is that the judge and jury – who could very well decide your financial future – may not have any knowledge of your particular business. The ins and outs of your industry could present a learning curve and could affect the final outcome of their decision. If specific industry knowledge is vital to understanding the nature of your lawsuit, that could be a pretty big ask.

You’ll also want to take a hard look at what you’re hoping to get out of the process. If you want to recover funds or get compensation, you’ll need to weigh legal costs against what you could realistically hope to gain from a trial. While some precedents might stand, there isn’t a clear way to know what the court will award. And that’s assuming that the ruling is in your favor.

Behind the Trial

Many people will opt to settle. On the other hand, we’ve known some clients who simply can’t see eye to eye with the opposing party. Strong emotions could obscure reason and sometimes parties can disagree over applicable facts or how the law should be applied. In other cases, a client may not care about cost and prefers to stand on principle. 

A trial will ultimately delay the day of reckoning for the accused party. That means that should you win the case, it will take that much longer to receive recompense. While filing and the actual trial may be quick, the interim beforehand can delay a resolution for years. And if an appeal is filed after a ruling, you can tack on even more time. The backlog and schedule of the court factors in, along with the time it takes to acquire all the data from anyone involved in the case. Scrutiny will be tough, and the process can take a lot out of anyone. For these reasons, a client must be made aware of the risk at hand and be willing to take it on.

Sadly, there are some times when a plaintiff or defendant simply isn’t informed of the risks involved or is given bad advice and decides that a trial is best. In this case that lack of awareness or poor counseling can really cost in the end. Even if they decide on settling, it could be far too late to avoid unnecessary expense.

Weighing Options

As with any legal matter, it’s hard to be objective. Whether the outcome of a case can be called positive or negative depends heavily on the parties involved and how they are affected. But one main thing to know is that if a legal team rushes a client into litigation without clearly explaining risks and informing the client of what’s at stake, that is irresponsible and potentially detrimental. 

Clients can lose more than life savings if they proceed with litigation that could have been avoided through other means. At times, professional relationships are permanently damaged and a person’s reputation is irreparably hurt. These are things that money can’t buy back. So if you’re in a situation that seems to be leading you down the lawsuit path, it is good to know what other options are available.

Here are a few alternatives to consider:

Direct Negotiations. Oftentimes the offending party may not be aware of their offense. Once they are confronted they could be willing to make things right. Negotiation can be simpler, cheaper, and a quicker way to settle issues.

Small Claims Court. This is an option if the amount that you’re looking to secure fits under a specific threshold and if your case is pretty straightforward.

Threat of a Lawsuit. If neither of the above options will work, sometimes just the threat of litigation can move the offending party to make amends. Hiring an attorney to review your situation and communicate on your behalf shows that you’re serious and willing to take on a trial. If the other party isn’t and wants to keep dealings private, they might be open to settling.

Arbitration and mediation are two additional processes in which the degrees of legal authority and involvement by attorneys vary. They are options to consider if you’re looking for a basic resolution to a relatively simple dispute. But there will be complex cases based on uncertain factual information that might need a third party to weigh in and decide the outcome. If the two sides are too far apart to compromise, filing a lawsuit may be the better option, despite the toll it can take.

Sound, Solid Advice

At Calkins Law Firm we stand firmly behind our clients. We’re ready to help you resolve things in the best way possible with your goals as our guide. So if you’re looking for solid legal advice and a clear path forward, reach out to us today. During the upset that litigation can bring, draw on our expertise as a steadying force. It’s our honor to serve you. 

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