To Litigate or Settle?

By: Neharika Salhotra and Minh Luong

Every day, hundreds of cases are resolved without the need for going to trial and mediation or arbitration between parties is usually sufficient to handle the matter at hand. Yet sometimes, defendants attempt to fool the plaintiffs through settlement offers that are far lower than what the plaintiff could make through trial. But litigation is a long-drawn process that may potentially have undesirable consequences if you are not prepared. In such cases, settling may be the best path forward. But what exactly do we need to consider when solving this problem? Each case is unique, so there is no definitive answer, but you can keep the following considerations in mind before planning for your individual situation:

WHAT IS LITIGATION?

Litigation is defined as the process of resolving a case by presenting evidence and arguments to a court or jury after filing a lawsuit and exchanging information with the opposition through discovery.

WHAT IS SETTLING?

Settling is when a defendant makes an offer to a petitioner and attempts to resolve the case without going to court. However, settlement can also occur after the trial has begun and sometimes even during jury deliberations.

WHAT FACTORS SHOULD YOU EVALUATE WHEN DECIDING WHETHER TO LITIGATE OR SETTLE?

1. Financial Costs of Going to Trial: Trials can be a long-drawn process that can cost you and your attorney a lot of time. Time is money, and you may be losing more than you can afford to if you choose to go to trial. This is an important and primary factor to consider before getting into litigation or you risk losing your retainer. 
2. Opportunity Costs of Going to Trial:  Along with financial costs, there are also costs including your time, relationship with the opposing party, and mental health, among other things. One should evaluate whether the benefits of going to trial outweigh these opportunity costs as well.
3. Strength of Your Case: Sometimes, settling is the strategically better option when your case is unlikely to hold up sufficiently against your opponent in court. In that case, settling outside of court may end up getting you a better deal.
4. Attorney Advice: Remember, your attorney has a lot of experience and understanding of the law. You are also paying for their insight. Thus, it is important to take into consideration the pros and cons your attorney recommends. It is important that you ask questions and fully understand the points your attorney makes instead of blindly concurring.
5. Does Settling Feel Justified? This is an intuitive feeling that you must ask yourself before evaluating the above 4 options. Do you feel like justice has been served with your decision? Do you feel satisfied with the deal as it is? The answer to this question should determine your path forward as the goal of securing justice would be far from complete without it. The skilled attorneys at Chugh, LLP are ready to help with any compliance needs, or answer any questions small business owners may have.