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The majority of legal claims filed in civil court do not reach the trial stage-- most are resolved earlier through a negotiated settlement among the parties. An informal settlement can even take place before any lawsuit is filed. Through settlement, the plaintiff in a civil case agrees to give up the right to pursue any further legal action in connection with his or her case, in exchange for the payment of an agreed-upon sum of money from the defendant (or the defendant's insurer). In rare cases, instead of paying money the defendant will agree to perform (or cease performing) a certain action.
If you are considering settling a legal claim in your civil case, or if you have received a settlement offer, you should talk to your attorney and receive his or her thorough assessment of the case and the prospects for settlement. Consider the following points:
- Amount he or she thinks the case is worth in a range of dollar amounts.
- Verdicts and settlements in similar cases.
- Chances of winning at trial.
- Unfavorable publicity for either side (civil court trials are open to the public and media scrutiny).
- Amount of personal information that could be revealed at trial or through further discovery.
- Possible disclosure of business information or trade secrets.
- When the case is likely to be called for trial.
- Practical difficulties in trying the case.
- Weaknesses in your evidence.
- Weaknesses in your opponent's evidence.
- The amount of the defendant's insurance coverage.
- The defendant's own monetary resources.
- The defendant's lawyer's negotiation tactics (your lawyer may have negotiated with the lawyer before, or has talked to other lawyers to get an idea of what to expect).
- The extent to which your opponent is likely to play "hardball."
- If you are the plaintiff, ask how much of the settlement proceeds will be applied to your lawyer's fee and your expenses.
- If you are the plaintiff, ask how the settlement payments will affect your federal and state income taxes.
- Talk about what you're willing to concede in order to get the case settled.
- Discuss the minimum amount you will accept.
- Consider the possibility of a partial settlement, that is, settling the easy issues first while you continue to negotiate the more contentious issues.
- If you are the plaintiff, consider accepting a remedy other than money.