Settlement Struggles


By F. Andrew Carroll, Esquire

A client gets served with a lawsuit by his old business partner and is understandably outraged. The client runs to his or her lawyer with orders, “I want to make that jerk rue the day he messed with me!”  Armed with orders the attorney returns fire.  An answer and counterclaim lead the way before discovery begins.   Counsel inquires whether his client wants to make a settlement offer now. Before costs get too heavy.   “Never!  Why should I? It’s his fault. He’ll pay for this.”

Then discovery begins. Interrogatories, document requests and request for admissions are exchanged by each side. Clients hate these. Then come the depositions.  Clients hate these more.  The war campaign mounts and mounts.   Also mounting are the attorney’s fees and costs.  That gets the client even hotter.  “The jerk is causing me fortune with no legs to stand on.”

About this time, the attorney again asks,”Do you want me to make a settlement offer now?” Puzzled, the client questions, “Why I should make a settlement offer now?  We’ve invested so much and it’s all his fault.  Doesn’t it show weakness?”

The difficulty for the lawyer and the client is that it may show weakness or concern, but in many cases the lawyer and the client must swallow a “so what.” An attorney has the obligation to shed his client’s emotions.  It’s not easy by any means, but it is often essential.  Make a business decision.  Ask yourself if the case makes sense.  For the client, two questions must be answered. First, when I win, does my opponent have funds to make the litigation worthwhile?  Second, will my attorney’s fees exhaust my winnings?  Keep in mind that in the majority of cases, attorney’s fees are not awarded to the prevailing party.  They are generally only awarded when a statute or a contract provides for them.

So when I advise my clients to make a settlement offer it is not because I am afraid of the case, the other lawyer, the jury or the judge. It’s because settlement is often the best business decision.  If there are no means to recover attorney’s fees and you know that your client will spend $30,000 in fees even when he wins, why not offer up to the $30,000 early in the case?  When the jury rules your way, the client will have expended sum that amount regardless.

Now if it’s a matter of principle, and the client wants to continue the battle, that’s fine with me too. Let’s keep knocking heads. But don’t kick yourself when it’s all said and done. Pride and principle are good things, just expensive.


To find out more about this topic, please contact Drew at (703) 836-1000.


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