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Should I Settle My Lawsuit? 4 Things to Consider Before Suing

By Ronnie Farhat, Esq.

The vast majority of lawsuits in the United States do not go to trial. Litigation is an extremely draining process, both financially and emotionally, for all parties involved. As a result, the vast majority of lawsuits that are filed are ultimately resolved through settlement. Assuming you are already involved in a lawsuit either as the plaintiff (the person who filed the lawsuit) or a defendant (someone who the lawsuit was filed against), here are some of the factors you should consider to determine whether it is appropriate to settle at any given stage of the litigation. This article is perfect if you need to start or are involved in a lawsuit and need a business law attorney, business contract attorney, or business litigation attorney.

What Are Your Goals?

First, it is critical that you have a strong understanding of what your goals are in the business litigation. Are you seeking to recover money for something that happened to you or your business? Do you have a contract dispute? Were you named as a defendant and are simply seeking a to get out of the lawsuit, or do you have potential countersuit? Regardless of the situation, once you know what your goals are in the litigation, you will then be able to assess whether to settle with the opposing party . Just as with any other negotiation, you should also work to have a proper understanding of the opposing party’s goals as well in order to know if this will be possible. The most effective settlements are ones where everyone wins if that is something that can be done.

How Strong Are the Claims?

Once your goals and expectations for the lawsuit are realistic, you need know the relative strength of your claims versus those of the opposing parties’. To most accurately assess your situation during this stage, you need to be as objective and open with your attorney as possible about your case. While it would be nice to get exactly what you want in the litigation, if the opposing party has strong arguments in their favor, you may need to compromise more than you would if their arguments have no evidentiary legs to stand on. A combination of knowledge in respect to the goals of the parties in the lawsuit and the relative strength of their positions will give you a better idea of what is possible in terms of a settlement.

Will Continued Litigation Strengthen My Position?

With the parties’ goals and the strengths of their positions as they stand in mind, it is time to determine what the ideal litigation strategy is for you to achieve your goals. As the lawsuit moves forward, your circumstances and position of influence in the negotiation can change, both for better or for worse. If the cost of continuing the litigation is worth the additional leverage you are likely to obtain from doing so, it may be worthwhile to continue to litigate. However, at some point you may either be hurting your negotiating power by continuing to litigate, or at the very least, the costs of continuing to do so may result in diminishing returns. In an ideal situation, you should start to negotiate a settlement as soon as you have the appropriate leverage you need to achieve your goals while having spent as little on the litigation as possible. This is assuming of course that you can trust the opposing party to live up to their side of the bargain. In circumstances where what you are seeking is more than money damages, you might want to get creative to have the court enter an agreed order or the like to help enforce certain actions or conduct if your attorney feels that a settlement agreement might not be enough.

Understanding the Risk of Continued Litigation

Regardless of the time and money that is spent on preparing for a lawsuit, there are countless factors in the litigation process that are out of you and your attorney’s control. Other people involved in the case, whether they are opposing parties, judges, or jury members will not always react predictably to you and your attorney’s litigation strategy. As long as the litigation continues, there can be no guarantees that your position will remain the same or that costs can be controlled, so keep that in mind. Generally speaking, once you feel you are in as good of a position that you can be in to achieve your goals in the lawsuit, the earlier you reach a settlement, the better.


If you are involved in litigation, you should always be open to settlement should the right deal be achievable. While these are only some of the many factors to consider and every lawsuit is different, these concepts are pretty widely applicable to litigation generally and thus important to keep in mind regarding settlements.

If you have been sued and need help with your lawsuit and looking for a business law attorney, contract attorney, or business litigation attorney, you can call our office to schedule a consultation to (630) 517-5529.

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