Study Finds That Settling A Lawsuit Is Better Than Going To Trial In the Vast Majority Of Cases

A part of my practice involves mediation and collaborative legal practice. Both mediation and collaborative practice are dispute resolution techniques used as a alternative to litigation to settle a dispute. I believe that settlement, which is a product of mutual agreement, is almost always better than litigation. Settlement involves the principal of self-determination. That is, the principal that the parties in the dispute are in the best position to know what their true interests are. In a settlement, whether achieved through mediation, collaborative practice or other means, the parties negotiate a compromise together and leave the bargaining table with an agreement they both can live with. By contrast, in litigation someone else decides the parties’ fate – either a judge, a jury or an arbitrator. More often than not each party is unhappy with the outcome, which often leads to additional litigation.

A soon-to-be-released study of civil lawsuits found that settling a lawsuit is better than going to trial in the vast majority of cases. As reported recently in New York Times, most plaintiffs who pass up settlement and go to trial end up with less than if they’d settled. Plaintiffs who opted for trial over settlement were wrong 61 percent of the time, the study found. Defendants also made the wrong decision about going to trial, but were wrong far less often, in just 24 percent of cases. “In just 15 percent of cases,” the Times reported, “both sides were right to go to trial — meaning that the defendant paid less than the plaintiff had wanted but the plaintiff got more than the defendant had offered.” The study will be published in the September issue of the Journal of Empirical Legal Studies.

“The lesson is,” said Randall L. Kiser, a co-author of the study, “in the vast majority of cases, plaintiffs are perceiving the defendant’s offer to be half a loaf when in fact it is an entire loaf or more.”

The New York Times article on the study can be found here – Study Finds Settling Is Better Than Going to Trial –