Chapter § 1.12 Settle or Trial

• Jurisdiction: United States
• Publication year: 2020

§ 1.12 Settle or Trial

[1] Case-by-Case Analysis

As discussed in section 1.11, in-house counsel consider many variables when deciding to settle or take a case to trial, and that decision is made on a case-by-case basis. “Each case is a business [decision] based on the cost, based on the impact on the company, and it is non-emotional.”⁹⁷ For companies, litigation is a risk and business cost, not a business opportunity. Thus, in-house counsel will often conduct a cost-benefit analysis when deciding how to resolve a case. They remind executives that litigation will be difficult, and it is better to have “an understanding of how to manage a dispute before it gets to litigation.”⁹⁸ Litigation is also uncertain and risky, so counsel must consider the impact a negative outcome may have on the company.

For example, counsel can use the cost-benefit approach when assessing how to resolve a number of nominal cases that, in the aggregate, can be very costly to defend. By settling these types of cases, the company might save money by avoiding the costs associated with disruptive, protracted litigation. This approach can reduce a company’s caseload by almost ten percent while cutting future costs.⁹⁹

Because the dynamics of litigation can change, counsel should remain flexible with respect to litigation strategy and resolution. The doors to pretrial resolution may open up if counsel is able to engage in productive discussions with another party before trial. “Part of in-house counsel’s job is to get a case into a posture where the company can get the best value for its money. If there comes a point in a case where it makes sense to settle for business reasons, in-house clients need to know that the company should get it resolved as quickly as possible.”¹⁰⁰

[2] Protecting Against Copycat Cases

In-house lawyers often have to take a “trial stance” on certain types of suits “to counter the trend toward many suits being filed seeking quick settlement.” To do otherwise would potentially make the company a target for copycat cases. Although litigation may cost more than the potential recovery for the plaintiff, companies fight potential copycat suits “to show folks that we are not going to be any target.”¹⁰¹ The long-term benefit of protecting the company by discouraging future suits is often worth the litigation costs. A company can succeed at fighting copycat personal injury and employment cases by taking a hard stance that it will “fight the bogus cases and develop a...