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Settlement Doesn’t Always Mean Settling for Less

toby munz

Settling cases before trial is an integral part of our civil justice system. In fact, this is what happens most frequently—cases are settled or are dismissed before a final trial or hearing. Settlement, like litigation, is a process, and many opportunities to settle present themselves during the various stages of litigation. There are a number of reasons why settlement should be explored during a dispute.

The Pros of Settlement

The biggest advantage of settlement is that it is often a cheaper way to resolve disputes. It can save valuable time and court fees, as well as arbitration or administrative law hearing expenses. Settlement also keeps the control over the dispute in the hands of the parties. It removes the uncertainty inherent in a trial and the unpredictability of a jury trial, and allows both parties to directly negotiate their own terms for resolution. Settlement permits this dialogue and internal control over the process.

Additionally, settlement may avoid a delay in a resolution, since the process is not at the mercy of the court’s schedule and various litigation timelines. Settlement also conserves the resources of the parties, and therefore society, which would otherwise be spent on resolution costs, legal fees, and other expenses. Court dockets are freed up to handle other disputes that are not readily resolved.

Because of their favored status, settlements are enforceable and protected by courts. Once a settlement is reached, the court can enforce the agreement if all its material terms have been agreed upon by the parties. A valid settlement agreement is like any other binding contract and enforceable in the same way. Some state jurisdictions have statutory laws or rules of practice specifically requiring a written settlement agreement or in-court admission that a settlement exists before the settlement of a lawsuit can be recognized. However, many states do not require any writing and an oral agreement will suffice.

Settlement is Ultimately the Client’s Choice 

However, just because settlement negotiations begin, does not mean that parties must eventually settle. Parties are free to choose how they resolve their disputes during the litigation process. These settlement negotiations and discussions are often protected by federal and state laws. Settlement is also not always without its own complications. The process can get stalled if there are many plaintiffs or defendants and where there are communication difficulties among parties.

There are rules governing the authority of an attorney to enter into settlement for their clients. While some states have laws that prohibit an attorney from entering into a settlement agreement without the express consent of the client, there are varying opinions on what permission is required from the client to enter into settlement. It is important for attorneys to familiarize themselves with local state and federal rules regarding how settlements are determined by courts.

Attorneys should ensure they are familiar with local laws regarding settlement agreements to protect themselves and their clients. Attorneys must also communicate with their clients, making sure they are aware of all their options. Ultimately, the decision is to settle or litigate rests with the client. The attorney’s job is to present information and make sure the client can make an informed decision.