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  • Writer's pictureKyle Persaud

What defines a reasonable settlement?

About two-thirds of civil lawsuits settle out of court. (See a study showing that here.) So, if you’re in a civil lawsuit, you will likely have to ask the question: What is a reasonable settlement?

Many clients, when they consider a settlement offer, ask me if I think the offer is reasonable. I often tell them: You are the best judge as to whether an offer in your case is reasonable. If it’s a child custody case, you know your child better than anyone, and you know how much time the child needs with you. If it’s a money settlement in a civil case, you’re the best to know whether it’s a reasonable offer, because you care about your money more than anyone else. If it’s a plea bargain in a criminal case, you will bear the consequences of accepting the punishment, so you are the most motivated to consider whether it’s a reasonable settlement.

I recognize, however, that the decision of whether to accept a settlement can be one of the most difficult decisions anyone can make. Obviously, you don’t want to give away too much. But, you also don’t want to walk away from a reasonable settlement, and risk going to court and losing everything.

Sometimes I will leave it to the client to decide whether to accept a settlement. Other times, though, if I have a strong opinion about whether a settlement is reasonable, I will try very hard to persuade a client to accept or reject a settlement. Here, I’ll offer some guidelines about what to consider in choosing whether to accept a settlement.

1.     Keep in mind that you will never, EVER, have a 100% chance of winning any court case. There is no such thing as a sure-win case. In an earlier post, I explain whey you will never have a 100% chance of winning any court case. I won’t rehash that post in its entirety here, but it boils down to this: to have a 100% chance of winning a court case you would need to have an absolutely airtight legal argument (which you almost never will) and a judge who never makes mistakes (there’s no such thing.)

On top of that, most clients believe that their case is stronger than it actually is. If you’re emotionally caught up in a contentious dispute, your judgment will likely be colored so that you won’t be able to see the weaknesses in your own case.

Which means that, in your case, you almost certainly have less chance of winning than you think you do. This means that if you do not accept a settlement offer and choose to go to court instead, you will risk losing everything. I have had clients who say, “I’ll reject the settlement and go to court, because I’ll win anyway.” This is false thinking, and you should resist the temptation to think that way.

In this video, Yale Law Professor Lincoln Caplan says that most of the major corporations stay out of court if at all possible, and prefer to settle out of court:

Prof. Caplan says that corporations prefer to stay out of court because of court’s “unpredictability.” Remember that corporations are able to hire the best lawyers in the business. These lawyers understand the court system. If you think that you have a good chance of winning in court, and that court won’t be unpredictable, then you think that you know more than the top lawyers in America. Chances are, you don’t.

2.     If you settle a case, you’ll likely have to give more than you want to give, and take less than you want to take. But the other side will, too. Often, in order to gain a peaceful resolution where you actually gain something, you will have to sacrifice and compromise on some points. You may not like that, but it’s a part of life.

3.     Examine your motives for choosing to accept or reject a settlement. If you want to reject a settlement simply because you’re angry with the opposing party, that’s not a good motive, and you should probably accept the settlement at that point. But you may have good motives for rejecting a settlement. If it’s a child custody case and you suspect abuse, you don’t want to leave your child in harm’s way. If your motive for rejecting a settlement is love and the protection of someone, that’s a good motive. Some spouses, who are victims of “battered-spouse syndrome” allow their ex-spouses to take unfair advantage of them.

4.     Although you are the best judge of whether to accept or reject a settlement, you should seek wise advice. A good lawyer can help you decide whether you should accept a settlement or attempt to push for more. Many clients consult multiple attorneys to get a second opinion. Also, don’t be afraid to seek the advice of wise friends and family. They can help you see if they think your motives are sound. If you’re a Christian, pray about it and seek God’s wisdom.

5.     Remember the words of Jesus Christ in Matthew 7:25-26, “Come to terms quickly with your accuser while you are going with him to court, lest your accuser hand you over to the judge, and the judge to the guard, and you be put in prison. Truly, I say to you, you will never get out until you have paid the last penny.”



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