Three Ways to Kill a Good Settlement

April 2010
By By Judge Jerome LaBarre, Multnomah County Circuit Court.

Not every case settles. But most of them do. In civil litigation, time is money. So the longer you go before settling - the more expensive it becomes. Not long ago I presided over a series of big dollar civil jury cases that reminded me of Benjamin Franklin's tired aphorism "A stitch in time saves nine," i.e. settle early or pay more. In every one of these cases it was obvious to me that if the parties had conferred early and done full and frank settlement exchanges, each case could have settled quickly for a reasonable amount. But once full-scale war erupted it was too late. Soon positions hardened and settlement economics disappeared.

Why is it that some cases just cannot settle until they get to the courthouse steps? Or why do some actually go to a trial that early settlement could have avoided? There are of course myriad reasons. In my experience there are three things which almost always kill early settlements.

1. Don't Give Legal Advice to the Client

Most would consider it strange if an oncologist failed to give a patient medical advice about whether to undergo surgery. A decision on the settlement value of a case - plaintiff's opening demand and defendant's opening offer in a negotiation - also requires sound advice from a lawyer. The plaintiff in a tort case has no more of an idea about what to do than a patient facing a serious medical decision. Yet sometimes attorneys just leave the whole matter of settlement numbers up to the client. Of course the client must make the ultimate decision, but he or she needs good legal advice first. If you abdicate this role, you should expect settlement prospects to disappear.

2. Don't Give Damages Documentation to the Other Side

The courts have heavy dockets of personal injury cases. At trial without a stipulation the plaintiff will need to prove the reasonable and necessary amount of medical expenses incurred. When the client first comes into the office it will take time for the plaintiff's attorney to collect all of the medical documentation. However, as a case reaches the settlement stage it is essential to obtain all relevant medical records and billings. Perhaps the claimed medical expenses are totally accurate. Yet when the plaintiff's attorney simply expects an insurance company to accept an amount of economic damages on the attorney's word alone, then settlement possibilities quickly vanish.

3. Don't Treat the Other Side with Respect and Professionalism

The bottom line is that all people want to be respected. A good settlement requires meaningful and sincere communication. There are many reasons why professionalism is important. Not the least of which is that it lays the groundwork for a relationship which can ultimately lead to a good settlement. Treating your opponent disrespectfully lets bad emotions dominate the process and kills settlement prospects.

Settlement is part art and part science. From what I have seen, the process needs to move forward accentuating the positives and minimizing the negatives. Avoiding these three traps can have a significant impact on obtaining a settlement that will make you smile.