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SettlementThe majority of civil lawsuits are settled before trial; each party involved gives something up and agrees to meet at a middle ground. Settlement frequently saves time and money; one's reputation may also be a consideration if it is in one's best interest to keep a matter out of court and thus out of the public eye. Courts encourage settlement because they, too, save time and money when a trial is not necessary. In making any decision to settle you need to think very clearly about just how good your case is and think of it from the perspective of the potential decision maker. Put yourself in the position of someone on the outside looking in and see if you still feel as strongly about your case.


There are a number of important things to consider before making a decision regarding whether to go through with a trial or to settle ahead of time, including:

  • Defendant's Financial Position: if a defendant does not have the money a plaintiff seeks for damages, a trial may be fruitless and merely cost time and money without a satisfactory resolution
  • Chance of Success: once information have been gathered during the discovery process, a party to a lawsuit should have some idea of whether he/she would be successful at trial; if chances of success are bleak or unclear, settlement may be a better option
  • Costs: even a self-representing party, who will not have attorney fees, will end up paying certain fees and costs for filing and actually going to trial; if the costs associated with trial are greater than the potential recovery then settlement is a preferable resolution
  • Emotional Considerations: depending upon a party's demeanor and the subject matter of the lawsuit, a trial can be very emotionally volatile; in addition to the time investment, there are the prospects of testifying on the witness stand and of revealing potentially private matters before the public


If settlement is a desirable option, it is best to begin settlement discussions with the opposition as soon as possible; however, discussions can continue right up until the time of trial.


A formal OFFER OF SETTLEMENT can be written incorporating one's own terms and submitted to the opposing party. Alternatively, the parties can get together and cooperate to reach a settlement agreement that is acceptable to both.

The first step in negotiating a settlement is to come up with a strategy. Parties must be at least somewhat flexible, recognizing that the idea behind settlement is to reach an agreement, and that nobody will get everything they want; concessions must be made. Strategy, including what to ask for and how far to bend to the other side's adjustments, depends in large part on how strong one's side of the case is.

Major issues should be the focus during settlement discussions. There is no reason to waste time, emotion, and energy on trivial or minor points unless they are needed to round out the bigger picture. Concentrate on what you want to ultimately walk away with and stay on topic; throwing in too many inconsequential things may cause the other party to become frustrated and potentially less inclined to cooperate.

Rein in emotion. Hostile, abrasive behavior will turn others off and make a satisfactory resolution less likely. Remember, the idea behind settlement negotiations is to come to a mutually acceptable agreement; common courtesy and a civil demeanor go a long way toward making settlement negotiations successful.

Consider the use of "ammunition": if you have information that could be damaging to the opposing party or likely to convince them to move closer to your end on the settlement spectrum, it could prove valuable. Sometimes, reserving such information until a crucial point late in the negotiation will be most beneficial; other times, using it early on can lead to a faster resolution. The best timing of the use of such information will depend on the other party's personality, the nature of the information, and the strength of the respective parties' cases, as well as the length of time settlement negotiations last (parties may be more likely to bend when given the right push if negotiations have lasted a long time with little success).

Settlement Results

Once a settlement has been reached, in the form of a document called a SETTLEMENT AGREEMENT signed by both parties, the lawsuit is over. The agreement will describe the different points agreed upon between the parties, including how much money will be paid, who will pay, form of payment, time and place of payment, who will be responsible for court costs, and any other agreements.
The agreement also usually will state that a case cannot be brought up again in a new lawsuit on related issues. A document is filed, signed by both parties, releasing the defendant from obligations of the lawsuit, known as a NOTICE OF DISMISSAL (or "Stipulation for Dismissal").

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