Most business litigation matters end up settling prior to trial. But when? How? Wouldn’t it be in the best interests of businesses to immediately identify the potential issues and exposures, then sit down and work out a settlement? In a word…Yes. But that rarely happens.
In real life, cases generally don’t settle until a matter is very close to trial, which means that the litigants spend a lot of money on legal fees and litigation costs, and devote a considerable amount of time and energy on litigation related activities. This process can drain a business’ finances and distract its personnel from otherwise profitable pursuits. Everyone involved in the process is completely aware of this…but it happens anyway. Why?
Here are a few thoughts:
- Litigants want to win. It is human nature to want to be right, and to proven right in a court of law. If you settle, you can’t win.
- Some litigators and litigation departments operate like an assembly line. The case comes in to the office and the assembly line begins. Insufficient thought is given to a settlement strategy, let alone a strategy that is cost efficient. Before you know it, the case has proliferated into a complicated, expensive litigation.
- Emotional disputes are harder to settle. It can be difficult for litigants to resolve their cases if there is bad blood underlying their dispute. Emotional business decisions tend to be bad business decisions.
- It takes two to tango. It doesn’t matter that you want to settle, if your adversary does not want to settle. If either or both sides to a dispute are unreasonable, there will not be a settlement unless one side is willing to lose. A settlement is a compromise. If you or your adversary are incapable of compromising, the case will be tried.