What Are the Advantages and Disadvantages of Out of Court Settlements?

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Ultimately, legal matters can be resolved in a wide variety of ways. Sometimes, resolution involves litigating the matter from the initial filing of the suit all the way through a jury verdict or a bench trial. In other cases, the parties litigate for a period of time, and then decide to resolve the issue. In still other cases, settlement occurs very shortly after the lawsuit is initially filed, if the parties can find a workable solution for everyone involved. These types of settlements are often referred to as “out-of-court” settlements, and often, parties work toward resolution with the assistance of their attorneys or with the help of a neutral third party, like a mediator.

As with any type of resolution, these settlements can have their advantages and disadvantages. And depending upon your particular situation, an out of court settlement may or may not be the ideal resolution of your legal matter. Certainly, talking with your attorney before pursuing one path of settlement or another is always the most important step, but consideration of the following pros and cons of out of court settlements may also be helpful.

Advantages of Out of Court Settlements

Without question, out of court settlements do have several advantages. Some of these advantages include:

  • Reduced Expense: Choosing to take a case to court and litigate it from beginning to end can quickly become expensive. When you make the decision to go to trial, by default, you often incur more attorney fees because more time is spent gathering evidence, preparing motions and responses, conducting discovery, paying for witnesses, and more. This is not even to mention the time that you may miss from work, travel expenses, filing fees, and other associated costs that can quickly accumulate during the course of the litigation. Choosing to settle the matter out of court can reduce those expenses significantly.
  • Lower Stress: It is to be expected that going to trial can often create a significant amount of stress and anxiety. Court battles can often be contentious, lengthy, and expensive, and all of these things add additional stress to a time in your life that may already be stressful. After all, people typically don’t find themselves filing lawsuits to begin with during low stress times. Choosing to resolve the matter out of court may reduce some of that stress.
  • Ensuring the Outcome You Desire: One simple truth about taking matters to trial is that the outcome is often unpredictable. While you may present your case in the best light possible and put forth all of the evidence you feel best supports your position, the truth of the matter is that you can never ultimately know how a court will rule on the facts of your case. Each judge is unique, as is every jury, and within the law, there is always room for interpretation. As a result, the outcome of your case may not be exactly what you were hoping it would be. When you choose an out of court settlement, you know what you are agreeing to ahead of time, because you have the freedom to work with the other party toward a resolution that is satisfactory to everyone involved.
  • Less Publicity: Another truth about trials is that they are public affairs. Court documents are public records, and public testimony about very private matters can understandably be unsettling and undesired. Choosing an out of court settlement allows you to keep your private matters more to yourself. And if that is something you prefer, it is certainly a very viable option to consider.

Disadvantages of Out of Court Settlements

As with most legal matters, where out of court settlements are concerned, there are, of course, two sides of the coin. And while they do offer many advantages, there may be some disadvantages that are worth considering as well. These include:

  • An Imbalanced Power Dynamic: In some cases, two parties are simply not well suited to work toward a settlement together. In some cases, depending upon the particular circumstances involved, one party may feel intimidated, manipulated, or otherwise coerced by the opposing side to accept a settlement that is, in reality, less than what they desire or truly believe that they deserve. Any number of factors might come into play that make this the case. But it is important, as a client, to be honest with your attorney if you feel that this is true in your particular case, and that you would be better served by allowing the court to decide the matter. In some cases, the parties simply need a more formal setting to resolve their issues, and this is understandable.
  • A Greater Purpose: Many cases are filed for personal reasons – by those who feel they need to and deserve to be made whole following an unfortunate event. In other cases, however, lawsuits are filed for the greater good – civil rights and constitutional law cases being an excellent example of this. Some cases are filed with the goal of bringing awareness to a certain issue or to a particular injustice that might affect not only the particular plaintiff, but many other people as well. When this is the case, settling out of court is often not the preferred method of resolution, because the parties involved truly want to have the issue made public.

Ultimately, any method of resolving a lawsuit will have its own advantages and disadvantages. When it comes to your particular case and your unique circumstances, consulting with an attorney who is knowledgeable and experienced and who can advise you as to the best course of action in your case is always a wise decision to make.

Call Smithey Law Group, LLC Today

At Smithey Law Group LLC, we have more than 45 years of combined experience successfully representing clients across the community in a wide variety of labor and employment law matters. We understand the law, and we understand the best strategies for pursuing justice on your behalf – whether you are litigating a matter all the way to a trial, or whether you are pursuing an out of court settlement. We would be honored to have the opportunity to pursue justice on your behalf as well. Call us today – we look forward to speaking with you soon.

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