Being party to a civil lawsuit does not necessarily mean you will be headed to court for a trial. There is no shortage of civil suits that never make it that far. This is because the two parties agree to settle out of court. Paying may be more advantageous to one party than the other, but both parties tend to get something out of it.
There are several reasons for settling. Defendants sometimes agree because they stand to lose less money by doing so. Plaintiffs sometimes decide to avoid the stress and costs of going to court. For the remainder of this article, we will focus on plaintiffs. Below are the main advantages for them settling out of court.
1. A More Speedy Resolution
Settling tends to be much faster than going to trial. When parties go to trial, there are all sorts of delays to contend with. Some are built into the system to protect both parties’ rights. However, other delays are instigated by one party or the other to slow things down.
Reaching an out-of-court settlement tends to go a lot quicker. The attorneys for both parties sit down and hammer out the details. Where trials could take months or longer, payments can be reached as quickly as the two parties are willing to find common ground.
2. More Certain Satisfaction
From a plaintiff’s point of view, one of the biggest advantages of settling is a more certain satisfaction. Defendants willing to settle tend to have the means to pay some settlement quickly and without further issues. The two parties agree, and the plaintiff receives payment shortly after that.
This is generally not how it works when cases go to trial. According to Salt Lake City’s Judgment Collectors, judgments rendered in civil cases can take years to collect. A plaintiff can win its case and wait for payment when the decision expires 7 to 10 years later.
3. Lower Legal Costs
Settling out of court means lower legal costs for both parties. From the plaintiff’s perspective, this means more actual compensation. Paying less for court costs and legal fees means keeping more of the total settlement amount. There is nothing wrong with that.
When going to trial, a win by the plaintiff usually means the defendant must also cover attorney’s fees and court costs. But those fees and expenses are rolled into the total judgment payment. So, if a plaintiff has trouble collecting, the attorney’s fees and court costs might have to be paid out of pocket.
4. No Opportunity to Appeal
An out-of-court settlement is final and legally binding on both parties once signed. To a plaintiff, the finality of a payment can be invaluable. It can provide peace of mind and closure. Best of all, there is no opportunity to appeal a settlement.
On the other hand, winning a judgment in court does not offer any finality. A defendant can always appeal, and appeals only draw out the process. It could take years to resolve all the requests a defendant might file. Only then can collection efforts begin in earnest. But how much more time will it take to collect?
Settling out of court is not always in the best interests of either plaintiffs or defendants. Going to trial is sometimes the wisest course of action. However, when settlements are achieved, both parties tend to benefit to some degree. Payments are compromise agreements in which both parties get some of what they want.
