The vast majority of lawsuits settle before they get to trial. It is reported that only approximately 5% of cases go to trial. If you have a strong case, why would you want to settle instead of going all the way to trial?
There are several reasons why settlement is usually the smarter choice, which is not to say that you should accept a bad settlement, of course, but at some point in the litigation, it may be worth it to settle. The reasons are as follows:
- Lawsuits are expensive. In typical cases, the client pays the lawyer in stages, not all at once, for the entire lawsuit (although that would be the case in contingency cases). As the case progresses through the various stages of litigation, the client will get bills from the lawyer. Some stages are more expensive than others. For example, Examinations for Discovery often require considerable preparation by your lawyer, and then there are the actual examinations. This can be an expensive stage for the client. Further, trials are usually the most expensive stage because they require a lot of preparation and then full consecutive days, depending on how long the trial is scheduled for. A trial of fewer than 10 days is considered a “short trial.” Some may be as little as three days if the case is not complicated. However, some cases may be more than ten days, and these are considered “long trials.” For each day of trial, the lawyer may require a full day to prepare beforehand. So, for a 10-day trial, the lawyer will probably be devoting 100% of their time to prepare for it in the 10 days before the trial. That is 20 days of legal fees that the client will have to pay. The lawyer usually asks for a trial retainer well in advance of the trial. At the end of the trial, the Judge will ask the lawyers to make “costs submissions” because the loser at trial has to pay part of the entire legal fees incurred by the winner of the case, from the beginning of the lawsuit until the end of the trial. So there is a big risk if you lose the trial; you will have to pay the legal fees of the other side.
The settlement resolves a case faster than going all the way to trial. Lawsuits can take years to complete. Sometimes, it can take five years to get to trial. The courts are overwhelmed with cases, and scheduling a trial can take a long time, especially for cases over ten days. Settlement before trial avoids the wait. Lawsuits can be not only financially draining but emotionally draining to the parties as well. Lawyers are used to the stress of a lawsuit, but it can be very stressful for a client. Why prolong the financial and emotional stress if you can resolve matters sooner by settling?- Lawsuits can be risky. You might think you have a very strong case, but you do not know who the trial Judge will be until shortly before the trial. Maybe the Judge will see things differently than you and your lawyer do. There is almost no such thing as a guaranteed winning lawsuit. There are costs and risks. Some cases are more so than others. Due to the costs and risks associated with going to trial, you have to make sure it is worth it to go to trial. If the lawsuit is for a lot of money, and there is no reasonable settlement offer on the table, then if you are the Plaintiff, it may be worth it to go to trial from a costs/benefit/risk perspective. Further, when there is a trial, the Judge may be forced to make decisions on a party’s credibility. That may be unflattering to the party that was not believed by the trial Judge. Once the Judge writes the Decision, the detailed assessment of someone’s credibility could be very damaging to your reputation. Judgments are on the Internet forever and can be read by the public on the website https://www.canlii.org/en/. Your lawyer should give you a frank opinion as to the strengths and weaknesses of your case before the trial so you can make an informed decision as to whether you want to go to trial or settle before.
- As the saying goes, if both parties are unhappy with a settlement, then it is probably a good settlement. Plaintiff may think that the offer is not enough, and the Defendant may think they are paying too much. That is how you know that the parties came to a reasonable compromise to avoid a trial. Only 5% of cases go to trial due to the risk, cost and wait time. That being said, sometimes you have to go to trial if a settlement cannot be reached. You need an experienced trial lawyer when you go to war. Hope for a settlement, but prepare for a case as if it is going to go to trial.
Also read: https://www.cranglelawfirm.com/civil-litigation-step-by-step-process-and-overview/