Settlement Agreements

All good lawyers, specifically good commercial lawyers will tell you it’s a fact most cases settle before they ever come to court. This is both a necessity and the logical outcome of the judicial process.  It is a necessity 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 strengths and weaknesses of each party’s case and give them incentives to settle.

Furthermore, 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 achieve?  And what type of process should govern settlement negotiations.  Here are some tips:

(These 6 tips are based on the Ethical Guidelines for Settlement Negotiations produced by the American Bar Association)

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

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

Communication: Good lawyers must consider and discuss with the client promptly 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 lawyers 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 owes an obligation to constantly communicate the status of the discussions as well as the subject matter of the negotiations to the client.

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