Settlement and ADR

• Author: Aaron B. Maduff
• Pages: 417-450

RESOLUTION

WITHOUT TRIAL

RESOLUTION WITHOUT TRIAL

RESOLUTION

WITHOUT TRIAL

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SETTLEMENT AND ADR

19-3 SETTLEMENT AND ADR § 19.1

CHAPTER 19: SETTLEMENT AND ADR

§19.1 TASK: NEGOTIATE SETTLEMENT

§19.1.1 WHAT AND WHY

§19.1.1.1 Advantages

Advantages exist for your client in negotiating a settlement of pending litigation. A settlement insures a pre-

dictable outcome and may also provide an opportunity to negotiate terms that a court could not award, such as

a good job reference or outplacement service. Jury trials, at the end of the day, mean that you have turned over

control of the decision to people you have never seen before and do not know.

From the employer’s perspective a trial is a failed negotiation. For the employer, it is “heads you lose, tails

you do not win.” That is, in litigation, the very best an employer gets is a defense verdict that cost it money. The

reality is that most cases that go to a defense verdict still cost the company more in attorneys’ fees than settling the

case. The trial process is so expensive that even a costly settlement after summary judgment has been denied and



at trial is, for the employer, a pyrrhic victory. Even a small win for the employee is a huge loss for the employer

   

   

performing the substantive tasks for which they were hired and sit around during trial preparation and depositions.





employee faces the possibility of going to trial and losing, or getting less than the amount of the employer’s settlement



Most employment discrimination litigation has a strong undercurrent of emotion. The parties have had some

prior relationship together and it failed. The employee may be hurt, angry, bitter or frightened because of the

employer’s conduct. The employer may feel betrayed and angry over an ungrateful, disgruntled employee. The

longer the dispute lasts, the more entrenched the parties may become in their respective positions. Hurtful state-

ments may be made in depositions and the parties may both be headed toward the “Field of Revenge” for the rest

of the playing season.

§19.1.1.2 Disadvantages

Generally speaking, an earlier settlement is better than a late one. However, in some circumstances, early

    

    

    

a competent, healthy assessment of settlement options and risks. If, for example, your client was raped and is

    

disservice to the client and, at worst, malpractice.

   

correctly your negotiating position. Assume that the defendant or the individual harasser whom you may have sued



number of employees to assess your compensatory and punitive damage limits), as well as information about the



records on property ownership, investment holdings and the like. If the defendants are not forthcoming or are being

coy about what they are producing, you will need to do some formal discovery to gain this information. You owe

 

statements at settlement that they are teetering on bankruptcy and can’t pay up.

§19.1.2 WHEN



judges may also require the parties to meet early in the litigation to explore settlement, either individually or with

the judge. Rule 26 anticipates that the parties will discuss settlement as part of their Rule 26 conference. Usually