14 Oct Weighing the Benefits of Settlement vs. Trial Under 16.1

If you and/or your business are currently embroiled in litigation, or plan to be engaged in litigation in the near future, at some point in the litigation you will likely need to consider whether it would be more beneficial to accept or to make a settlement offer to resolve the case quickly, or whether it is in your best interest to take your case to trial.  This decision has become a little more complicated under mandatory Rule 16.1.  To wrap up our Rule 16.1 series of blogs, Edwards Law weighs the pros and cons of settling your case v. trying your case.

The Cost of Taking a Case to Trial

As we addressed in our last blog, prior to mandatory Rule 16.1, the cost of trial for a civil case could be upward to $100,000.  Most of the costs incurred in taking a case to trial prior to mandatory 16.1 were discovery costs and trial preparation, which included hours of preparing a litigation strategy, asking witnesses questions, preparing witnesses for trial, gathering evidence to prove your case, determining what evidence the other side has against you and how you can keep your opponent’s evidence out, or better yet, use it to your advantage.

Under the new mandatory Rule 16.1, discovery costs and trial-prep costs are significantly reduced because the new rules only allow you 6 hours of deposition, one expert, and 5 requests for production.  The new rules should bring down the average cost of taking a case to trial to $60,000.  This amount however does not take into account motion practice such as motions to strike, motions to compel, or motions in limine, which may be filed if you or your opponent are not cooperative in making disclosures of information about the case.

When Should I Consider Settling my Case Instead of Going to Trial?

Before mandatory Rule 16.1, it was typically almost always more beneficial to settle before trial because the cost of getting a case ready for trial was so exorbitant.  To spend close to $100,000 to take a case trial, with no guarantee of winning your case (there is always a chance to lose at trial), just doesn’t make good business sense.

However, the rules of the game have changed significantly with the implementation of mandatory 16.1.  Under the new rules, a lot of the costs associated with preparing a case for trial have been dramatically reduced or eliminated.  Thus taking a case to trial is no longer a huge financial burden.  However, there are other concerns you must be aware of when deciding to settle a case under the new mandatory Rule 16.1.  For example, do you have all of the evidence you need to prove your case?  Since the discovery you are allowed under the new mandatory Rule 16.1 is extremely limited, you may determine you don’t have enough evidence to roll the dice at trial.  Worse yet, does your opponent have undeniable evidence against you?  In that circumstance it is surely in your benefit to settle.

Another consideration is whether you are fully prepared to address your opponent’s witnesses at trial.  Under the new mandatory 16.1, your ability to depose your opponent’s witnesses before trial, to test their veracity and their “likeability” at trial, has been eliminated.  Thus you may decide to settle, in lieu of taking your chances at trial with a formidable adverse witness.

These new considerations under mandatory Rule 16.1 make clear that the most beneficial aspect of settlement over trial is certainty.  The new mandatory Rule 16.1 severely hampers your ability to test the theories of your case and all but prevents you from analyzing your opponent’s witnesses prior to trial.  Settling your case prior to trial provides you with the certainty of knowing how much money you will be getting/paying, and when you are getting/paying it, and can be done confidentially so that the amount of settlement is not disclosed to anyone but the parties to the litigation.

Another obvious consideration to choosing settlement over trial is your stress level.  Litigation is stressful, as it consumes your life for months or even years, takes hours and hours out of your day as you prepare for trial, causes you to lose sleep, and stands to affect your bottom line significantly with seemingly no end in sight.  Settling your case is significantly less stressful than going to trial, no matter how strong of a case you have.

If you and/or your company are in the midst of litigation, and need a second opinion on whether you should settle, call Edwards Law today for a complimentary consultation.