Settlement Agreements

Settlement Agreements

All good lawyers will tell you that most cases settle before they ever come to court. This is both a necessity and the logical outcome of the judicial process.  It is necessary because if every case were to continue through trial and a decision by a jury or judge, the judicial system would quickly be overwhelmed.  It’s a logical outcome because the very nature of the legal process is designed to illuminate the strengths and weaknesses of each party’s case and give them incentives to settle.

Furthermore, the settlement allows parties to exercise more control over the terms of the settlement and have access to remedies that might not be available from a trial court.

But what kind of settlement ought to be achieved?  And what type of process should govern settlement negotiations.  Here are some tips:

(These six tips are based on the Ethical Guidelines for Settlement Negotiations produced by the American Bar Association)

Purpose:  The purpose of settlement agreements is to resolve any disputes the client may face satisfactorily.  The attorney represents the client legally and financially and must always act in the client’s best interest.

Honesty:  A lawyer’s conduct in negotiating a settlement should be characterized by honour and fair dealing.

Communication: Good lawyers must promptly consider and discuss with the client any and all alternatives to resolving the dispute outside of litigation.  Without assistance from lawyers, clients often are not aware of potential alternative methods for dispute resolution.  A lawyer’s desire to convince the client of the lawyer’s support for the client’s position ordinarily will not justify delaying efforts to discuss early settlement.  As negotiations progress, the attorney is obligated to constantly communicate the status of the discussions and the subject matter of the negotiations to the client.

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