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Settling The Score: Why Lawsuits Usually Don't Go To Court

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legal paperworkAround 95% of lawsuits end before they begin, in pre-trial settlements. In fact, the likelihood of a settlement is so high that most good personal injury lawyers prepare for it specifically, in addition to a full-blown court case. Many of the most experienced attorneys craft their arguments to make settlement seem the defendant's best option.

If you were injured, and want to pursue a lawsuit, settlement should be in the front of your mind. It should also be foremost in your attorney's thoughts. So what is a settlement in reality? How does it actually work?

Settlements & Personal Injury: A Case Example

First, some quick explanations:

If you were injured in a cab accident, and decided to sue the cab owner for negligence, you would be the plaintiff in the case. The cab owner you sue would be the defendant.

Lawsuits, and the court system itself, exist to create a neutral, relatively objective space. Within this space, the validity of facts can be disputed, or argued. For example, you believe that the cabbie ran a red light, causing the accident in which you were injured. The cab driver vehemently denies this. In court, your attorney can introduce exhibits, like a video of the cabbie running the red light, to corroborate your version of events.

What Is A Settlement?

In theory, settlements are very simple. Rather than proceeding to court, and arguing the facts of a case before judge and jury, the dispute is resolved before things get to that point. In most cases, one party offers to pay the other a certain amount of money, after which the issue is dropped.

Settlements can be agreed upon before a lawsuit is filed, pre-trial, or during the course of a lawsuit. Many states, although not New York State, require parties to attempt settlement negotiation before filing suit.

Why Do Defendants Settle Out Of Court?

It's cheaper. Lawsuits can be expensive, for both defendants and plaintiffs. Attorneys, court fees, travel, time, and even expert witnesses need to be paid. Settlements, on the other hand, can save both parties money, even the defendant who has to pay the plaintiff.

It's easier to control. When you go to court, you assume a lot of risk. If the judge or jury doesn't accept your arguments, you're out of luck. It's in someone else's hands. Settlement allows defendants and plaintiffs to steer negotiation directly, toward mutual benefit if possible.

It's safer. The chances of winning a court case, on average, aren't very good for defendants. Over 90% of all personal injury trials that come before a judge or jury are decided in favor of the plaintiff's case.

There's no "guilt." In all but the rarest instances, cases end in a verdict. Defendants are found either "guilty" or "not guilty." This finality isn't required in a settlement, allowing defendants to solve the problem without formally accepting wrongdoing.

Why Would A Plaintiff Settle?

It's quicker. There are no accurate statistics on the average length of a civil lawsuit, but many experts would tell you anywhere from one to three years from start to finish. Settlement allows injured victims to receive the compensation they desperately need in a more timely fashion.

It's flexible. In court, every statement is governed by strict regulations. Someone's always looking "over your shoulder," in a sense. Settlement proceedings are looser, freer, and allow for more innovative approaches to dispute resolution. They're private, too, which can be a plus.

There's less risk. As reported by the New York Times, a wide-scale study of civil lawsuits found that "most of the plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken that offer."

Alternative Dispute Resolution: How We Settle Our Differences

Bringing a lawsuit is risky. Unless you have a watertight case, you could spend a lot of time and money, but end up with nothing. Settlement negotiations allow plaintiffs and defendants to negotiate, present their sides of the argument in a cogent way and seek a mutually acceptable resolution. So how does it play out in real life?

There are three basic forms of settlement negotiation: face-to-face conversation, mediation and arbitration. Lawyers aren't required, but are definitely recommended for spotting potential loopholes in any agreements that you make.


Definitely your simplest option, this is just a good old conversation. Present your side of the story, and see how the other party responds. People are often more reasonable than you'd expect. In the event that you do agree on a solution, ask an attorney to draft an agreement and sign it with witnesses present.


In mediation, you call in an objective third-party to help you out. This mediator doesn't have any special legal authority, and can't force either party to do anything they don't want to. They just listen, and try to steer the conversation toward productive solutions.

If you come to an agreement, a mediation agreement, which is legally-binding, can be written up.


Arbitration is a mix of mediation and true litigation. Bring in another objective third-party, this time an "arbiter," and try to come to an agreement. But this time, the arbiter has the power to make a lawful ruling on your dispute, making it a great idea to bring a lawyer to any arbitration session.


Laurence P. Banville
Date Published: November 10, 2014
Laurence P. Banville is the managing partner of Banville Law. As an experienced personal injury attorney, Mr. Banville helps clients recover compensation from those responsible for his clients' injuries. Our firm is located in New York City, serving clients from the five boroughs: Manhattan, Brooklyn, Queens, The Bronx, and Staten Island.
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