Most personal injury plaintiffs will be plagued by this question at some point during their lawsuit. Should you settle and take less than what you think your case is worth, or risk it all at trial? The vast majority of plaintiffs will choose to settle — and for good reason. I read an article once which argued that jury trials were no more likely to get to the truth than “trial by combat” or “trial by ordeal.” While jury verdicts may not be that arbitrary, I can say, having been through many jury trials (and hearing horror stories about many others), the one thing I know is that accurately predicting a jury verdict is about as likely as correctly predicting a coin flip. Think O.J. or Casey Anthony. Most experts didn’t see those verdicts coming.
Settlement — A Bird in the Hand. . .
The downside of settlement is obvious to most plaintiffs — you get less money than you would get from your best possible trial outcome. From a defendant’s standpoint, though, this makes perfect sense. Why would a defendant settle with you for the most you could get at trial? That makes about as much sense as you agreeing to settle for $0.00 when there is a chance you could win at trial.
The upsides to settlement are numerous:
- You get paid a lot sooner than if you have to wait for a trial date.
- You no longer have to stress about your lawsuit.
- You don’t have to worry about a hung jury (I actually had two of these on the same case — which then settled).
- The defendant can’t appeal a settlement. He definitely can appeal a judgment — which could easily tie up your money for more than a year after you win at trial.
The benefits boil down to a guarantee of payment in the near future and a lifting of stress. Of course, this all depends upon you receiving a reasonable settlement, given your damages and chances of winning at trial. This begs the question of what your lawsuit is worth, which is the subject of another article.
Trial — The Grass is Greener . . .
Many plaintiffs who settle their cases later experience buyer’s remorse and curse at not having had “their day in court.” Of course, this hindsight is viewed through rose-colored glasses. They quickly forget the stress that the uncertainty of their lawsuits injected into their lives. They become much more optimistic about what their chances were at trial. The risk of recovering nothing from their lawsuit is ignored now that it has been removed.
On the positive side, winning big at trial can be euphoric. You feel vindicated, relieved, and you act like you “knew you would win all along.” Bitch-slapping an arrogant insurance company or major corporation that refused to make you a decent settlement offer feels great. This brings me to the ultimate point of my article — trial should be reserved for those times when the defendant is totally unreasonable.
When You Should Choose Trial Over Settlement
Some cases just can’t be settled. Most often these will be cases that involve one of two issues. The first issue is liability. Liability refers to whether the defendant was negligent or committed some other tortious act. If the defendant has an argument that he is not liable, he has a chance to win outright at trial and not have to pay you anything.
The second issue is causation. Did the defendant’s conduct, even if he was negligent, legally cause the injuries you claim? This can arise in many cases, such as those where the plaintiff had a pre-existing condition, the plaintiff was involved in multiple accidents or the plaintiff’s injuries could have been caused by an illness which naturally occurs in people who never had an accident.
Cases involving liability and/or causation issues are particularly difficult to settle when the damages are large. If you have $1,000,000.00 in damages, but the defendant has a chance to pay you nothing at trial, coming to a consensus on a reasonable settlement figure may be impossible. From your standpoint, you can’t afford a low settlement offer due to medical bills, lost wages and the chance of being fully compensated with a win at trial. From the defendant’s standpoint, why pay a large settlement when it may not have to pay anything after trial? When the stakes are particularly high, even when the amount of damages (should you win) is not hotly contested, a win-it-all or lose-it-all case may be impossible to settle. These are the types of cases that really should be tried.
When Should You Settle?
In cases where liability and causation are not at issue (there are cases where defendants will admit these things before trial) and the only issue is the amount of your damages, the possibility for a fair settlement is much greater. When the defendant knows that it is going to have to pay something after trial, and the only issue is how much, the case should settle. These types of cases should not be tried unless the defendant is completely unreasonable in evaluating your damages. The good news for you is that should your defendant prove to be unreasonable, you have the benefit of going into trial knowing that you will win, and you are really only gambling on the amount of the win.
Thankfully, most parties to lawsuits will act reasonably when evaluating their odds of success at trial and the amount of damages at issue. This is why the majority of civil cases settle. As long as you are being reasonable, you should have no regrets about your decision, whether it be to settle or go trial.