When Do Settlements Most Often Occur in Civil Actions?

When Do Settlements Most Often Occur in Civil Actions?

After you retain a law firm and one of your lawyers informs the potential defendants of their representation of your interests, there is a possibility that the defendants will be willing to discuss the subject of a settlement in order to avoid the costs of litigation and the risks involved to them.  While such pre-suit settlements have become more infrequent, they may be the most beneficial to a party because the costs and expenses are likely to be minimal, and law firms will sometimes, depending upon the circumstances (including the number of hours spent working on the case), be willing to accept a reduced attorney’s fee.

The next most likely opportunity for settlements to occur happens near the end of discovery when both sides have had the opportunity to assess the evidence available in the case and are contemplating or beginning to prepare motions for summary judgment in an effort to avoid the necessity of trial or to at least reduce the number of claims, defenses, or related issues that must be tried before a jury.  Recognizing the potential for settlements during this time in litigation, most courts have adopted a practice of requiring litigants to engage in court-ordered mediation in an effort to assist the parties in negotiating a settlement during such a crucial time period in a civil action.  Either the Court will appoint, or the parties will jointly select a mediator (i.e., a practicing lawyer or retired judge) to conduct such mediation and to assist the parties in reaching a settlement.  While such court-ordered mediations do not guarantee a settlement will occur, they have become significantly helpful in assisting parties to reach settlements.

When such mediations do not result in a settlement, it is not unusual for the mediator to agree to remain available for the parties if they need his or her services in the future to assist them in reaching a settlement either through telephone/zoom calls, email exchanges, or additional mediation sessions.  Indeed, many, if not most, settlements occur (with or without the help of a mediator) after the court has ruled on motions for summary judgment and related evidentiary motions, and the parties are faced with actually incurring the time commitment and related costs and expenses of conducting the trial within the next one or two weeks.  At this time, the parties are forced to more carefully assess the risks and benefits of permitting the judge and jury to decide their case and to be the most reasonable they can in assessing the value of the case and a fair settlement amount.

Lastly, when settlements do not occur immediately before or during a trial, it is possible that the parties will have one last opportunity to settle the case when the losing party has decided to file an appeal of the verdict or judgment to an appellate court.  At this time, both parties must assess the costs of filing or defending an appeal and, more significantly, the possibility of having to retry the case should the verdict or judgment be reversed by the appellate court. Recognizing these factors and the related costs and expenses, some appellate courts require the parties to inform them whether a settlement is possible and, if so, will assign a mediator to assist the parties in conducting such settlement negotiations.  However, at this date, most appellate courts do not do so and leave the issue of discussing a settlement to the parties themselves.