Broadcasting Settlement Preference Runs Risk of Higher Cost in the Long Run

Some companies have been making it known that they prefer to hire defense attorneys who can move cases towards settlement. The motive in this strategy appears to be an attempt to keep down litigation costs, which can be substantial in litigation that can carry on for years. However, by broadcasting such a strategy, these companies run the risk of paying higher settlements and opening up the door for additional litigation. 

There is nothing wrong with settling cases, especially bad liability cases, as early as possible to avoid extended litigation costs on what will eventually be a losing battle. But, such strategy and tactics should be kept between the company and its attorneys, and not projected in any manner for the opposing side to potentially take advantage of. If the opposing side knows that settlement is the preferred treatment of cases and that a company is more likely to settle as opposed to litigate, they will be emboldened to put forth higher settlement demands and to stick to those demands. Additionally, a company may see a rise in litigation. The plaintiff’s bar may be more willing to bring more actions with questionable liability against the company if they believe that the company would just prefer to settle cases out.

If a company prefers quicker settlement negotiations, then it is always better to negotiate from a position of strength. If the case happens to be one of bad liability, sometimes that only position of strength comes from the fact that they have hired extremely competent attorneys who are well versed in their field of practice and who the other side knows will make them litigate the case to its fullest extent if required. That position of strength vanishes when the company becomes known as one that would rather settle then litigate.

Many poor liability cases have successfully been settled early by companies whose initial strategy has been for a quick settle, but who at least projected a willingness to litigate the case to its fullest extent if necessary. It is well understood that, as defense attorneys, sometimes the best thing we can do for our client is to negotiate a settlement as quickly as possible given a bad factual situation. This task becomes more difficult if a company is known to prefer quick settlements.

While it makes perfect sense for a company to want to dispose of litigation as quickly as possible, especially cases with bad liability, such strategy and tactics should be kept behind closed doors. As one of the main reasons for quick settlements is to save money, a known settlement strategy could run the risk in the long run of costing a company more by higher settlement demands and the rise of more cases being brought against the company.

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