“SO, WHY SHOULD I SETTLE MY LEGAL DISPUTE?” HERE ARE 6 REASONS:
Before you (or, if you are a lawyer or paralegal, your clients) say “no!” to settling a lawsuit (or pending lawsuit), carefully consider the reasons for saying “yes!”:
There are no “slam-dunks”. Every case is risky. If you can’t accept that your case, or any part of it, is too strong to fail then at least accept that sometimes (just sometimes) the judge or jury “gets it wrong”. Therefore, even if you are certain, lawsuits are inherently uncertain. Settling on terms which are short of your (and the other side’s) best-case scenario is rational since: a) A 3rd party decision maker is taken out of the equation, leaving those who know their own case best to craft the outcome, and b) No one suffers their worst-case scenario at Court.
Most cases typically move slowly toward their Day in Court – although that “day” is often, in reality, several days or even weeks. Instead, settling a case usually results in no further (or much more) time being spent by the participants. Settling early will result in the greatest time savings.
No matter how your case is funded, there is always a cost. Even if you are not paying your own legal fees, or you hired a lawyer on contingency, there are still monetary and non-monetary costs (i.e., time that could be spent on work, with family or friends, or anything better than litigating). If you lose, the Court may order you to pay the other side’s legal costs. By settling, you control monetary and non-monetary costs, thereby avoiding unpleasant surprises.
Courts are public. Thus, Court decisions, and the reasons for them and the persons involved, are made public. Thus, they are usually, and permanently, on the internet for the world to see. Settlements are typically private. Strangers rarely, if ever, know the settlement terms. As well, parties to a settlement normally do not acknowledge any liability, even if payments are made.
In many cases there are freely agreed-upon settlement terms, which a Court could never order. For example: Apologies, reference letters, favourable (and legal) tax treatment of settlement funds, releases, payments to charity, and many other creative ways to resolve disputes.
Finally, Court decisions are often appealed to higher Courts. Some appeals are successful, while some are not (but, see all the reasons above as they apply to appeals too). Settlements are different: They are, typically, final, binding agreements and not subject to appeal.
Mitchell Rose is a lawyer, mediator and settlement counsel with Stancer, Gossin, Rose LLP in Toronto.
This newsletter is for educational purposes and is not intended, nor should it be relied upon, as legal advice.