What is a Settlement? 7 Things You Need to Understand About Your Case

what is a settlement

If you are pursuing a lawsuit, your lawyer may raise the possibility of settling. You may wonder, what about my day in court? I deserve a total vindication!

However, before you make any quick decisions, you should educate yourself on exactly what is a settlement. You may realize that it can save you money, time, and angst.

Here are several things you need to know about legal settlements, to determine whether this may be a viable option for you.

1. Not an Admission of Guilt

If you are sued for negligence in a slip and fall case on your property, your opponent’s attorney may offer a settlement to avoid going to trial. If you agree,  this does not necessarily mean that you are admitting liability.

A settlement means that both parties agree on terms- usually financial- to end their dispute. There is no final adjudication on whether the plaintiff had a viable cause of action or the defendant was guilty or not.

Many settlements include specific contractual language that the agreement does not constitute an admission by either party of any wrongdoing.

2. May Be Confidential

A settlement is a contract between two parties who agree to stop litigation. Both parties may include any clauses they like, so long as there is agreement on both sides.

An employer settling a case with an employee may include a confidentiality clause, preventing either party from disclosing the terms of the settlement or the circumstances which gave rise to the dispute.

However, some states are passing new laws that prohibit contracts making certain activities confidential, such as discrimination.

3. Expedient

One of the major reasons for settling a case is that it ends the process quickly.

Legal disputes arise from horrible situations, like car accidents, failed businesses, and even death. Going to trial means reliving the details of those circumstances over and over.

Legal processes also take a long time. Depending on the details of your lawsuit,  you may wait months- even years- before you get to try your case in front of a judge or jury.

Many people decide that the time and pain is not worth the effort of going to trial. Because the trial decision is ultimately up to a judge or jury, there is also a high degree of uncertainty about whether you will prevail or not.

You have no idea if your witnesses will stay strong under cross-examination. You don’t know if your documentary evidence will withstand scrutiny. You don’t know how long your opponent may delay the process.

Many people choose to take the “sure thing” and accept a settlement. This allows them to move on with their lives. It also takes away the uncertainty about whether they will prevail on the merits of the case.

4.  May Be Determined by a Class

If you have been injured by a product, you may be one of many people with a legal claim against the manufacturer. If your loved one perished in an aviation disaster, you may join many other families suing the airline.

In the cases of a large scale disaster or other matters where many people are affected, you may become part of a “class.” A class can have more power than an individual when negotiating a lawsuit settlement.

When a large group of people negotiates a settlement with a corporation, everyone involved must agree to the terms of the settlement. Many participants may end up sharing a very large amount of money. Most corporations will opt to settle rather than go to court in these very large cases, where the plaintiffs often have public opinion on their side.

5. Encouraged by the Courts

For years both state and federal courts have experienced serious backlogs. Budgetary and staffing issues contribute to long waits for court dates.

Besides the administration of justice, the legal process itself tends to move slowly. Lawyers file motions and contest each other’s filings, delaying trials for months.

Some parties even choose to prolong the process. This wears out their opponents while draining their bank accounts.

Judges often encourage parties to a lawsuit to settle. Where they can see hope for a compromise, they often tell the lawyers to urge their clients to negotiate.

6. Costs Less than Trial

If your lawyer charges by the hour, going to trial may incur significant legal fees. Litigators often have increased rates for their in-court time. In some situations, lawyers do work on a contingency basis.

Even if you are paying your attorney on a contingency basis, going to court is costly. You may have to pay for expert witnesses. You may have to take off work to attend depositions.

Settlements are appealing because they can give you a monetary reward in less time. If you need to get a new car or pay for medical expenses, you will get paid more swiftly.

You should also consider the risk factor. “A bird in the hand is worth two in the bush.” By going to trial, you may risk losing, in which case you would not have any compensation. You may even end up paying your own and the other side’s lawyers’ fees!

You may settle for less than your original claim, However, you know what you are going to get. You do not have that certainty in the courtroom.

7. For Civil Cases

You may wonder if you can also negotiate a settlement to a criminal case.

Although the term “settlement” usually pertains to civil cases, if you are involved in a criminal case your lawyer may negotiate with the prosecutor.

For example, you may be able to reach an agreement that if you plead guilty to a lower charge, they will drop the more serious charges with mandatory prison time.

What is a Settlement? It May Be The Answer for You

Whether you are bringing suit or you have been sued, a settlement is a legitimate way to bring to a close a difficult situation. By reaching an agreement with your opponent, you may save everyone significant money and heartache.

What is a settlement, you wonder? It may be the way towards peace and closure for you and your whole family.

Keep checking back for more practical tips on real-life challenges.


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