A Defendant may make an offer to settle at some point during litigation.
Should you accept that offer made by a Defendant?
The first thing to consider is whether you feel the offer is reasonable. There is no mathematical formula to determine if an offer is reasonable or not. Most times, it is a financial business decision.
There are several factors to consider whether an offer to settle is reasonable, which includes but is not limited to:
- Is the amount offered to you enough that you would be prepared to cut your losses? Would you be satisfied avoiding the further costs and time of litigation by accepting the amount offered by the Defendant?
- Could the offer also cover some of your legal fees to date? Knowing what you have spent and how much more you could potentially spend to proceed is something to take into account when considering an offer to settle. Could the amount offered outweigh the amount of time and money you would spend to get a paper judgment, which you would then have to enforce?
- Could you successfully enforce your judgment in full amount based upon what you know about the Defendant if you do not accept the offer?
Just because an offer is made, does not mean you have to accept the first proposal. Consider if there is room to negotiate the amount. Having some background into the Defendant’s finances is quite helpful when deciding on whether to accept an offer or not. Can the Defendant pay more than what they are offering? If so, provide a counter-offer for an amount you are comfortable with.
Judges tend to say that in a settlement, no party should be happy: the Defendant ends up paying the Plaintiff and the Plaintiff walks away with less than what they want.
Sometimes it may be best to walk away with something in hand, then end up with a paper judgment that may be unenforceable.
Considering an offer to settle must be based upon the factors that affect your position. There may not always be an easy answer when it comes to accepting an offer or not, but all reasonable offers should be considered.
Murray Brown, Licensed Paralegal