Last week we talked about the considerations, frankly negative considerations, employers and business owners should consider before they go to trial. That post raises the following question: What, if any benefit is there to a trial for a company?
Frankly, I am not sure there are any, unless demands made by the Plaintiff are so extreme that settlement is simply not an option. Even when a company wins, it may lose, in terms of the attorneys’ fees incurred. Winning a trial or case is all relative.
If the Plaintiff offers to settle a case for $500 and you win the case, but end up spending $1,000 in attorneys’ fees, that may be a win in principle but not financially. Likewise, if a Plaintiff makes a settlement demand of $500 and the jury awards $100 and you’ve incurred attorneys’ fees of an additional $200, that is technically a win. Whether a case is ultimately a win or a loss is in the eye of the beholder. Principle is a wonderful thing. I have had many clients tell me that they would rather spend the money with me than pay the Plaintiff any money whatsoever. Unfortunately, that story never usually turns out that well.
The reality is, trials are few and far between in our system. It is usually very bad cases that are tried or cases where one side misevaluates their exposure or chance for success making a trial necessary. Whether to settle or try a case should at all times be a business decision based on the financial ramifications and the advice of attorneys. Keep the emotion out of it.