Chapter § 2.09 Settlement

• Jurisdiction: United States
• Publication year: 2020

§ 2.09 Settlement

As one commentator aptly put it: “No litigator has achieved fame and glory as a settler of cases.”¹¹⁵ As much as trial attorneys might want to spend their careers trying cases, the economic pressures of continuing to litigate on both parties, in addition to the uncertainty of the result as trial often favors resolution of a case at some point in the lawsuit. That said, the common belief that at least 95% or more of all cases settle is unsupportable. “Although it is probably true that less than 5% of civil cases end with a trial verdict, it is incorrect to assume the inverse—that the remaining 95% settle.”¹¹⁶ Studies on settlement and litigation practices in Hawaii circuit court in 1996 and 2007 may provide the most accurate settlement rates thus far, and observers believe these rates can be extrapolated more broadly to other federal and state courts.¹¹⁷ The researchers who conducted the study found that, while about 88% of tort cases settle, only 54% of contract, and 55% of “other” cases settle.¹¹⁸ Thus, the settlement rate for all cases is “probably much closer to 50% or 60% than to 90%.”¹¹⁹

The same study found that many factors, such as judicial assistance, court-annexed arbitration proceedings or the type of negotiations, could have a significant impact on settlement. Telephone negotiation between lawyers ranked as the most effective means to settle cases. In fact, lawyers ranked telephone negotiation as having twice as much impact as other methods, including face-to-face negotiations between lawyers, judicial settlement conferences, court-annexed arbitration, and face-to-face negotiations among lawyers and parties.¹²⁰

There are several takeaways for plaintiffs from this study. First, they cannot automatically assume that a case will settle, particularly if the suit is not a personal injury case. As we’ve discussed throughout this chapter, plaintiffs should work to develop their case for trial from the outset of the lawsuit. Still, they should make every attempt to gain leverage for a favorable settlement in the process. Also, plaintiffs should use all available methods to settle a lawsuit (e.g., settlement conference, court-annexed arbitration), but don’t overlook the potential effectiveness of a simple telephone call with opposing counsel.

There are a myriad of other factors that bear on the timing and success of settlement. For example, counsel working on a contingency fee basis will naturally seek early settlements. Where the...