Dispute Resolution: Litigation

In my previous blog posts, I discussed settlement through informal dispute resolution and settlement through demand letters. Today, I will discuss settlement through litigation.

The Ultimate Goal is to Reach a Settlement, Not to Enter into Trial

Many associate litigation with going to trial. Yet, less than 10 percent of litigation cases actually result in a trial. The other 90 percent are either settled or dropped before trial occurs. As such, most litigants file suit with the goal of settling the dispute – not to enter into a trial. If you cannot settle a dispute through informal resolutions or through a demand letter, a lawsuit may be your best option.

Can You Afford a Trial?

Before you make the leap into litigation, you should understand the expense of trial. If a lawsuit inevitably ends up in trial, you must be financially prepared for it. A good lawyer will walk you through the expenses and discuss your options. If you cannot afford a trial, settlement through demand letter negotiation is a preferable avenue. Personally, I have yet to encounter anyone who wanted to spend the money on a trial unless they have exhausted all other options for settlement.

Bringing Suit Proves a Powerful Point

Ideally, you file a suit to prove a point. You are telling the other party that litigation will ensue if a settlement is not reached. I have seen lawsuits thrown immediately into settlement negotiation, even through mediation, without any discovery being conducted. However, this is not the rule. Typically, some discovery does take place. In such circumstances, you must hope that the amount you will gain in settlement exceeds the expense of discovery. Always keep this mind, as discovery is expensive.

The Settlement Process

If settlement is not discussed early on in the litigation process, it typically leads into a mediation forum. During mediation both parties are forced to exchange settlement offers repeatedly. Many mediation forums result in a settlement agreement on the spot. However, some attorneys and/or parties want to gather all of the evidence before coming to a settlement decision. This means mediation may take place both after the discovery process is over and just before the preparation for trial. Obviously, this is a course of action for a lawsuit in which larger amounts are at stake.

Next Time…

In my next post, I will discuss trial as the final form of dispute resolution.

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