When you think of a civil lawsuit, you probably imagine scenes from a tense courtroom drama with clever and combative attorneys and at least one shocking revelation on the stand.The reality in the United States is that most cases settle before the judge makes a decision.Accepting a settlement offer gives you the chance to realize more gains with less risk.
Step 1: Pay attention to timing.
During a civil lawsuit or administrative proceeding, a settlement offer may be made.After the trial has begun, the other side can make a settlement offer.The other side might want a more predictable way out of the situation if a settlement offer is made during the trial.If you are involved in a jury trial, this is especially true.Settlement offers early on in the proceedings, such as right after you have filed your petition, indicate a desire to get rid of the situation as quickly as possible.If you know more about the issue at hand, you might get less out of the case than you would if you settled it early.Sometimes a company offers an early settlement because it doesn’t want to reveal sensitive information or trade secrets, or it fears other parties will file similar suits.
Step 2: Settlements can be used to avoid risk.
Settlements can be used to avoid the financial and emotional costs of litigation and create certainty in the outcome.Accepting a settlement offer may mean taking less money than you would have gotten if you went to trial.You can never be certain if you will get everything you asked for at trial or not.If you went to court and won, you may have to pay more than you would have if you offered a settlement.Settlements may look more attractive if you don’t like your chances of winning at trial.
Step 3: You have the chance to get creative.
Settlement offers allow you to craft terms that fit the nature of the issue and come closer to satisfying the needs of all involved.If you tried your case in court, you can suggest terms that might not have been available in a settlement offer.Settlement agreements can require one party to make a formal apology to the other for the wrongs committed.A neutral reference may be included in the settlement of employment discrimination cases.
Step 4: Do you want a confidentiality clause?
A clause in many settlement agreements forbids the parties from revealing the amount or terms of the settlement.Large corporations want confidentiality clauses in order to maintain positive public relations.Aggrieved people prefer an open settlement agreement because they want the public to know about injustice.Attorneys can determine the value of similar cases in the future if the terms of the settlement are made public.The total amount of the settlement may be adjusted to compensate for a compromise if there is disagreement about a confidentiality clause.If the confidentiality clause went away, you might be willing to take less money because you want the world to know about the company’s pollution practices.
Step 5: Know how much you should get.
Make sure you know where the floor and ceiling are on the table.Don’t budge from the minimum you set if you’re willing to pay more.An attorney with experience in that area of law can help you figure out how to value your case.Assessing your priorities can help you arrive at an ideal settlement.Suppose you slip and fall at a donut shop, dislocating your hip.The donut shop is willing to pay your medical bills, but not the damages you think you are entitled to.The donut shop will give you and your family free donuts for the rest of your life.You might be willing to accept less money than you would otherwise if there was an offer like that.
Step 6: Make sure terms don’t violate state or federal law.
A number of contract terms are against public policy.At best, a judge would rule that term void; at worst, the inclusion of such a term could void the entire settlement.The best way to make sure your settlement doesn’t violate the law is to hire an attorney.Attorneys are bound by professional ethics rules and bar regulations to alert you to illegal terms and have them removed.
Step 7: The agreement needs to be drafted.
It is standard practice for the defense attorney to draft the agreement.The offer may be drafted if it was initiated with the other party.Professional ethics rules dictate that all settlement offers must be communicated between attorneys, who have an immediate duty to inform their clients.If you still don’t have an attorney at this stage, it’s highly recommended that you hire someone to at least look over the terms of the agreement and ensure it reflects your intent.Settlement agreements are usually drafted based on previous agreements and legal sources.Key provisions may be neglected without an attorney’s assistance.
Step 8: Carefully read the terms.
Make sure you understand everything in the settlement agreement by reading it several times.If you haven’t already, you should consult an attorney.The settlement agreement could affect your legal rights and obligations and may preclude you from taking further legal action in the future.It is possible to improve your chances of getting a favorable settlement by discussing the terms with someone who is familiar with civil litigation.
Step 9: The agreement should be signed by you.
All parties need to sign the agreement if it is to become legally binding.If you meet up with the other side and all sign the agreement at the same time, you can send a copy via mail, email or fax.All parties to the settlement have to sign the same document.An authorized representative will sign on behalf of the business if they are sued.If you have an insurance company involved in your workers’ compensation lawsuit, the settlement agreement may be signed by the claims adjuster.
Step 10: The exchange should be bargained for in the settlement agreement.
If the lawsuit was dismissed and the defendants handed over a check for the full amount, this is usually what happens.
Step 11: Inform the administrative agency where the cause of action was filed.
In many legal contexts such as class actions or workers’ compensation lawsuits, state or federal law requires court approval of any settlement made by the parties.The settlement is not binding until approved.If you don’t know if your settlement requires judicial approval, you should consult a licensed attorney.If court approval is required, an attorney can make sure the correct language is in place to get your settlement over the last hurdle.