Out-of-Court Settlement: When Is This the Right Choice?

Out-of-Court Settlement: When Is This the Right Choice?

Steven Schwartzapfel -Founding Partner Jun 16, 2022

For more than 35 years, Steven Schwartzapfel, the founding member of Schwartzapfel Lawyers P.C., has been one of New York’s most prominent personal injury attorneys. Steve represents clients in all types of personal injury cases. His experience, skill, and dedication have enabled Schwartzapfel Lawyers P.C. to recover hundreds of millions of dollars for their clients.

When you sue someone or are sued by another party, you may expect a lengthy legal process that eventually leads to a debate in a courtroom. But this isn’t the only potential outcome for your suit. While many lawsuits end up in a courtroom, many more are settled out of court.

There are good reasons for this. An out-of-court settlement can be more cost-effective, better for your legal needs, and more achievable based on the available evidence. Knowledgeable attorneys can advise you one way or the other and determine whether an out-of-court settlement or full lawsuit is the wiser choice in the long run.

If you’re not sure which is right for you, read on. Alternatively, contact Schwartzapfel Lawyers today at 1-800-966-4999 or online for a free case evaluation.

Out of Court Settlements Explained

Simply put, out-of-court settlements are legal agreements between parties that halt dispute processes. In theory, out-of-court settlements prevent future litigation, such as lawsuits, over the same topics or grievances.

For example, say that one driver impacts another and is clearly at fault. To avoid being sued, the at-fault driver offers to settle with the injured driver out of court. If the injured driver accepts this deal and a compromise is reached, the injured driver cannot sue the at-fault driver for the same issue in the future.

In many ways, out-of-court settlements are compromises. They substitute legal claims made by injured parties. During the out-of-court settlement process, the rights, damages, and liabilities of both parties are set and finalized going forward.

Are Out-of-Court Settlements Common?

Yes. Out-of-court settlements are very common due to their many benefits and because most at-fault and injured parties don’t have the time to devote to a lengthy legal battle. Out-of-court settlements are also very common for issues where one party is clearly at fault for the injury or issue at hand.

Out-of-court settlements are less common for cases in which fault is not so easily assigned. For instance, imagine a car accident scenario where both drivers are partially at fault for injuries sustained to their vehicles and bodies.

In this circumstance, both drivers might be less willing to settle out of court since they see the other driver as being more or entirely at fault for the incident. At this stage, legal professionals may be necessary to clear up confusion, gather evidence, and prove fault one way or the other.

More broadly, out-of-court settlements are common because:

  • Court cases can be very lengthy
  • Court cases are typically stressful, no matter which side you are on

In short, out-of-court settlements are simpler, easier, and faster in most cases. To learn more about the pros and cons of settling your case outside the courtroom, call 1-800-966-4999 and speak with an experienced Schwartzapfel Lawyers professional today!

Benefits of Settling Out of Court

There are many benefits to settling a grievance or legal battle out of court. These advantages are why many major lawsuits eventually end in out-of-court settlements, even if both parties in the case initially seem willing to go to court.

Less Stress and Time

First off, out-of-court settlements are significantly less taxing in terms of stress and time. Average lawsuits that go to court take several months, even for apparently open and shut or simple cases. That’s because both legal sides must go through discovery to gather evidence, must present their sides to the judge or jury, and then wait for a verdict.

In contrast, out-of-court settlements can take days or weeks. They’re much faster, which means that legal fees are also comparatively cheaper (more on that below).

Furthermore, everyone has a different stress threshold at which they begin to buckle under the pressure of court appearances and duties. For many average Americans and New Yorkers, the mere prospect of going to court can seem a bit too much to handle.

An out-of-court settlement with an arbitrator or mediator is much easier in terms of the stress level one is expected to take. This is doubly true if one is the at-fault party or the party accused of negligence and/or causing an injury. It’s oftentimes less stressful to offer to settle out of court with the aggrieved party instead of dragging things out with a full court trial.

Lower Costs

As noted above, many out-of-court settlements result in lower costs for both the plaintiff and the defendant. Even if you hire legal professionals who work on contingency fee bases (and you should), your overall fees will likely be lower since out-of-court settlements take less time.

While you also stand a chance of making less money from an out-of-court settlement than if you proved negligence or fault beyond a shadow of a doubt, you’ll owe legal representatives less money overall. Other costs, such as the time you have to take off work to appear in court, gas payments to drive to and from legal offices or the courthouse, and more, are also reduced with out-of-court settlements.

Then there are court filing fees, costs for investigations, depositions, and other ancillary fees. These are lower with out-of-court settlements compared to court cases. Bottom line: It’s cheaper for both plaintiffs and defendants to settle out of court in a majority of cases, even if a plaintiff hopes to receive a massive payout.

Call Schwartzapfel Lawyers today for your free case evaluation, or to learn more about NYS personal injury law and out-of-court settlements in general. Dial 1-800-966-4999 and allow our award-winning team the honor and privilege of fighting – and winning – for you!

More Certain Outcomes

Lastly, settling out of court often leads to more certain outcomes. Since out-of-court settlements by definition include compromise, legal professionals on either side of the dispute can more accurately predict:

  • What contributions you’ll have to make
  • What damages you may receive
  • What it is that you may have to sign

In contrast, jury verdicts are necessarily more uncertain. Furthermore, your legal team needs to focus on persuading the jury in a full court trial compared to just reaching a compromise with an aggrieved party or defendant out of court.

The increased certainty is a major point of attraction for those involved in the legal process. As any knowledgeable attorney will tell you, even cases you think are simple may have unexpected outcomes. Your legal counsel may advise you to settle out of court if there is a chance of receiving an unfavorable or surprise verdict from a judge or jury based on discovered case factors and evidence.

Downsides to Settling Out of Court

While settling out of court can be beneficial in many circumstances, there are also some downsides to keep in mind. These downsides could help you decide to push forward to a court trial or tell your attorney that holding a jury trial is wiser for your chances of a successful outcome.

Tougher To Get Claims Paid

Firstly, it is more difficult to get a monetary claim paid through an out-of-court settlement. Even if you and the plaintiff or defendant agree on the settlement on paper, you might still have trouble getting the claim paid in full at a later date.

For example, imagine a case in which you are injured in a car accident. The other driver is at fault and agrees to pay you a certain amount of money through either their insurance company or out of pocket in order to settle the matter out of court.

However, after signing the settlement paperwork, you don’t receive a check in the mail. You’ll then need to do additional work to make sure you get paid in full. In the worst-case scenarios, plaintiffs sometimes have to get court orders or judgments from the court to ensure they receive their agreed settlements or claims.

Lower Claim Amounts

In addition, many out-of-court settlements result in lower overall claim amounts compared to the damages you may receive from a successful court trial. Again, settling out of court means compromising with the plaintiff or defendant. That means one side is never fully correct or incorrect on the issue, at least in a legal sense.

Because you compromise with a settlement, your damages will likely be lower than you expect. However, remember that costs for legal proceedings for settling out of court are also lower than the costs included with a lengthy court battle.

Potential to Return to Court

Even if you and the other party in a legal dispute agree to settle out of court, there’s no guarantee that will work. For example, you could both approach the negotiation table and find irreconcilable ground between you and the plaintiff or defendant.

Then you both have to go to court anyway. If the settlement process does not work, you may have effectively wasted time and money and still have to convince a judge or jury in court. Therefore, settling out of court is a risk, even though most settlements go through and are legally upheld after signing an agreement.

When Is It a Good Idea To Settle Out of Court?

Generally, it’s a good idea to settle out of court under certain circumstances. These include:

  • When your legal counsel advises you that this is the case. Knowledgeable legal professionals know the odds of court cases resulting in your favor. If you hire an attorney for a personal injury, medical malpractice case, or any other specialization, listen to them. If they tell you you’ll have better odds extending a compromise offer to settle out of court, they are likely right.
  • When the other side looks more than ready to put up a lengthy legal battle or likely to try to pin the blame for a dispute on you. In these circumstances, it might be more time and cost-effective to offer a compromise by settling out of court.
  • When you and the other party are roughly equally guilty or at fault for an incident. In these cases, it is often wiser to extend the offer to settle out of court to the other party. Since both of you may end up receiving no net gains from a lengthy court battle, a settlement compromise – even if it’s just to agree not to sue the other party – might be a better overall idea.

However, if you are the plaintiff in a legal battle, the choice to settle out of court is ultimately up to you. Your legal team will fight for you no matter what you decide so long as you hire the right professionals for your needs.

Schwartzapfel Lawyers can help you determine when you should settle out of court or help you succeed in an upcoming lawsuit, so contact us today at 1-800-966-4999.

What’s Included in a Settlement Agreement?

If an out-of-court settlement is successful, legal professionals on both sides will draft a settlement agreement. This legal contract requires mutual agreement in consideration by both sides. It frequently includes sections or clauses such as:

  • The names of both parties for the agreement.
  • A section explaining the reasons for the settlement agreement. It might be labeled the “whereas” section.
  • A no admission of liability clause (see more below).
  • A “promise to pay” clause. This states the settlement amount that one or both parties agree to pay to each other.
  • A section for invoicing and payment schedules, as well as any other relevant details for money transfers.
  • A mutual release clause. This states that both parties collaboratively agree not to make further claims against each other after the settlement agreement is signed.

Does Settling Out of Court Equate to Guilt?

No. When you settle out of court, neither party admits to any guilt for the injuring circumstance or dispute. Settlements (and settlement agreement documents) do not typically say that anyone was right or wrong.

Indeed, most settlement agreements include clauses for “no admission of liability.” That means neither party can be held liable for the damages or injuries discussed during the settlement negotiations.

However, if you return to court after an unsuccessful settlement session, your or another party could be found guilty of another element of your broader dispute. For instance, if your settlement agreement only covers part of your grievances, you may still be able to convince a jury that the at-fault party is guilty of another part of the dispute between you and a legal defendant.

Contact Schwartzapfel Lawyers Today

Out-of-court settlements are important tools your lawyer may recommend depending on the specifics of your case. The right out-of-court settlement can significantly decrease the time it takes to see damages for a personal injury or auto accident, as well as save you money in the long run by avoiding a costly court case.

However, a full court trial may be the only way forward to a resolution under some circumstances. If you or a loved one have been involved in a personal injury, auto accident, or another case, knowledgeable legal representatives can help you get the compensation you deserve fast.

As experienced New York City lawyers, Schwartzapfel Lawyers is ready and able to assist with your upcoming case. Not only can we tell you whether an out-of-court settlement is advisable. We can also fight for you in court if settling out of court is not an option for one reason or another. Contact us today at 1-800-966-4999 for your free consultation!

Sources:

Schwartzapfel Lawyers, P.C. | Fighting For You

Five Ways To Keep Disputes Out of Court | Harvard Business Review

Settlement | Wex | US Law | LII / Legal Information Institute

How Long Do Criminal Cases Take After You’re Arrested? | Nolo

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