The Advantages and Disadvantages of Civil Suit Settlements

You have probably heard tales of people receiving large settlements for civil lawsuits without ever going to court, and that certainly has been true at times. However, the decision to settle comes with many disadvantages as well as advantages. 

What is a Settlement? 

A settlement is an agreement between a potential or current plaintiff and defendant. One side agrees not to pursue a lawsuit in return for money or a cessation of an action. It can happen before, during, or after a trial. It can even happen after a verdict. 

Typically, a settlement would occur before a trial in order to avoid the costs of a trial. These can be monetary and emotional costs. A defendant may agree to settle in order to avoid lawyer expenses. A plaintiff may agree to settle in order to get compensation more quickly. In either case, a party may agree to settle because reliving the accident or sitting in front of a jury may be too stressful. 

Some cases have a low probability of a judgement in the plaintiff’s favor. In this case, a settlement is better than nothing. 

Finally, some cases can end in a judgement against a defendant, but the defendant can appeal. This can make a case take months longer than it would have. The plaintiff may desire to settle instead of risk the loss of the judgement and speed up the payment process. Not all cases end with an option to appeal, but they can.

Partial Settlements

In cases where there are multiple types of losses, the parties may agree to settle on only part of the case. This can happen when a plaintiff agrees to settle on monetary damages. The party’s still disagree on punitive numbers, so the case will go to trial. 

If the case is in regard to a debt, such as owing on a credit card, a partial settlement is an option. The advantage of this is that a partial settlement allows the person to pay off the balance partially and not owe any more money. This does negatively impact his or her credit score. 

Florida Statute 768.79

Lawmakers created Florida State Statute 768.79 in 1986 in order to provide an opportunity for settlements during a lawsuit. In Florida, most courts will not allow a partial settlement offer. This is shown in the wording of the statute:

“The offer shall be construed as including all damages which may be awarded in a final judgment.”

It also states that the plaintiff has 30 days in which to accept the offer, and the court has the authority to enforce it if it is accepted. 

One other interesting part about proposals for settlements is how attorney’s fees are rolled into the settlement. If a plaintiff rejects settlement and receives a judgement that is 25% less than the offer, the defendant may be awarded attorney’s fees. Likewise, the defendant may reject an offer from the plaintiff. If the courts grant judgement that is 25% over the amount offered to settle, the courts may award fees to the plaintiff. 

Florida Rule 1.442

Florida Rule 1.442 supersedes all other laws regarding settlements. It outlines the procedure and applicability of settlements. This includes details such as when settlements can and cannot be offered. It also contains the items and statements that must be included in the settlement offer. Finally, it offers the manner in which a settlement can be accepted or rejected. These details are important because they make settlements valid and conclusive. 

Advantages of Settlements in Civil Lawsuits

While many of the advantages of settlements in civil lawsuits are apparent, they are still worth considering when you are facing litigation. This way you can weigh your options and make the best decision. The advantages of settlements may be the following: 

Takes Less Time:

Typically, a settlement takes much less time for a plaintiff to receive any compensation for damages. This is because there is no need for a trial, and preparation for trials can be very lengthy. It can take months to prepare for a trial, and this can cause further harm to the plaintiff. 

Guaranteed Awards:

If you aren’t sure you will win favor of the court in a lawsuit, accepting a settlement offer may be a safer option. This is the something-is-better-than-nothing approach, but it is guaranteed. The thirst for a large judgement can draw a person away from a settlement offer, but this is at the risk of receiving nothing.  

Less Stress:

Trials can be very stressful. Testimonies can bring up hard emotions. Also, the preparing and insecurity about a judgement can bring on increased stress. Accepting a settlement puts it all to an end. 

Plaintiff is in Control:

When a plaintiff accepts a settlement, it is his or her own decision. If the settlement isn’t enough, they can refuse it. The power to accept gives some semblance of control to the plaintiff. It is not in the hands of the judge and jury. 

Confidentiality:

Some civil cases include embarrassing details about either party, and civil cases are typically available to the public. A settlement can keep everything under wraps. 

Solutions Beyond the Scope of the Law:

The courts are limited in what they can make a defendant do to solve the issue that is the basis for the lawsuit. They can award injunctions to cease behavior, but settlements have very little limitations. You may be able to get more ambiguous compensation in a settlement. An example of this would be a public or private apology. 

Less Expensive:

Finally, an advantage to settling out of court is that it costs less. Even when an attorney is on a contingency fee, they will usually charge a higher contingency fee if going to trial. 

Disadvantages of Settlements in Civil Lawsuits

Every decision you make in a court case, prior to or after an actual trial, is a trade off. Therefore, the choice to settle a civil lawsuit may have the following disadvantages: 

Judgement in Favor of Defendant:

If you go to trial, you run the risk of the court finding the defendant not liable for your damages. All of the time and resources used to argue in court will be wasted. You will receive no compensation for your loss, and this is a real risk in any lawsuit. 

Lesser Award:

The whole idea of a settlement from the defendant’s point of view may be that the plaintiff will be awarded lesser damages in trade for expeditious payment. This is a major disadvantage to a settlement. 

Less Perceived Justice:

When the crime or act of negligence is highly egregious, a settlement may be perceived as a shortfall in the justice system. There’s no public record, and you may have taken a smaller judgement. You may not feel whole or satisfied when accepting a settlement. 

Regret: 

Especially when the amount of a settlement is much less than an expected or potential judgement, a plaintiff may regret accepting it. This leaves the plaintiff with a hole that cannot be filled after a settlement, and it may take years to get over it. Civil lawsuits are about compensation in order to return to a normal life. If you regret the judgement, you won’t be able to get there for quite some time. 

Overall, settlements are generally perceived as a positive mutual agreement that allows for fairness, while lessening the burden on the court system and its participants. However, it is important that all parties weigh the advantages and disadvantages of settlements in civil lawsuits. 

If you’d like to speak to a personal injury lawyer about a potential lawsuit, contact Kirshner, Groff, and Diaz. You’ll speak to an actual lawyer right away for a no-obligation consultation.