Studies have shown that very few cases actually end up in a trial by judge or jury. Instead, many seek a settlement before trial, and for good reasons. There are a number of advantages to an agreement that helps settle a case out of court, both for plaintiffs and defendants alike. Understanding those advantages, as well as how to settle a case out of court is key to avoiding a trial.
The Advantages of Settlement Before Trial
While there are many advantages involved in a settlement, one of the biggest ones is the lower cost of the litigation involved. Most people think only of attorneys’ fees when they think of the cost of litigation. However, there are so many additional costs, particularly if a case moves forward to trial. There are investigative costs during the discovery process, as well as extensive costs for depositions, expert witnesses, court reporters, records requests, and more. Beyond that, there is the cost of court filings, travel costs for lawyers and witnesses alike, as well as a number of other involved fees.
Another advantage in an out of court settlement agreement is the stress and time involved. Typically taking a case to trial can mean hundreds of hours spent in deposition rooms, courtrooms, and more. That may mean both sides have to take time away from work, travel to the locations involved, and spend time researching the right people to help with the case. Add that to the stress involved for both sides, and sometimes it’s simply not worth it to take a case to trial.
Another real advantage in settling before trial is predictability. Both the defense and plaintiff know what’s going to happen once a settlement agreement is signed. In a trial, though, there’s an uncertain outcome. Whether your case involves just a judge or a judge and a jury, no one is sure what might happen once a trial begins. Even if a plaintiff thinks he or she has a good case, there’s still a possibility a judge or jury might not agree, and that can have real consequences.
Privacy for both sides is an additional advantage. Once a case moves forward to trial, it becomes part of the public record. That means that medical records, relationships, and more can be thrust into the spotlight. For plaintiffs who appreciate their privacy, that may not be the best option. Moreover, it becomes part of the public record for all of time. A verdict can be used as a precedent for future cases, which means that sometime in the near future, the proceedings of the case may be examined in lots of courtrooms, by legal scholars, and even by law students.
How to Settle a Case Out of Court
For those reasons and so many more, both defendants and plaintiffs prefer to settle out of court, but how does that happen? It may depend a bit on the type of case involved.
Some companies use the Alternative Dispute Resolution Process (sometimes called ADR), which typically involves a number of potential processes, including arbitration and mediation. Arbitration involves a binding decision made by a third party, but it usually only happens when both parties have agreed, by contract, to enter arbitration.
Mediation happens both in cases that involve large companies and in those that are more typically seen in civil lawsuits, like personal injury cases. Mediation happens when both sides agree to bring in a neutral third party who does not have the power to impose a solution, but encourages both sides to come up with a solution to their own dispute. Sometimes a mediator urgest conversation between the participants. Sometimes he or she simply carries messages between the parties. In other situations, the mediator just maintains orders while creating the right environment for negotiation. Mediation is used in all kinds of conflicts, and it can be quite helpful to both parties.
Often cases that are settled begin with a simple letter from the plaintiff’s attorney to the defendant’s. It outlines the case itself and the desired judgement. The defendant’s attorney typically responds with a much lower number, then negotiations begin to create a settlement. During those negotiations, arbitration, mediation, or another process can take place. Should neither side be able to come up with a settlement, though, the final step involved is a jury trial.
If the two sides can come together, though, a settlement agreement is drawn up. It’s a legally binding contract, so it involves the reasons for the contract, a no admission of liability clause that clearly states neither party accepts wrongdoing in the case, a promise to pay section, and a payment schedule. It also includes a release clause that shows both parties will not make a claim against the other party.
Understanding how to settle your case is as important as understanding how to bring a case against another person. Settlement can be the right way forward in many situations, but to know whether it’s right for you, it’s best to consult with your attorney.
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