Over the past several months, I’ve had several Trials vacated after Defendants made last-minute settlement offers that our clients accepted. I realized it has been several years since I’ve blogged about settlements, so I thought there was no better time to blog about settlements than now!
Accepting or making an offer to settle is a mathematical-business related exercise by which it must be determined whether the amount offered is enough to end the litigation, having to take to consideration the amount claimed and what the legal fees incurred to date are and if the amount meets your bottom dollar amount.
Other factors to consider when making or accepting an offer include:
- What are the potential future legal fees to proceed with the litigation?
- The time and costs associated for you and witnesses to prepare for litigation. Is the offer good enough for you to spend the day (or more than one) in Court, rather than generating revenue?
- Your likelihood of success at Trial; and
- If successful, will you be able to enforce the full amount of your judgment, and what are the potential costs of enforcement?
Not all offers to settle are great, but there should always be room for negotiations, and negotiations are always encouraged if the parties are willing to do so.
Considering and accepting an offer to settle that is lower than the amount claimed, by assessing the factors above, is sometimes better than ending up with a judgment for a potentially higher amount that you might not be able to enforce. It’s all in the math.Murray Brown, Licensed Paralegal