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Lawsuit Settlement

Reading time: 15 minutes.

The moment you recognize you have a legal dispute, a focus on settlement should be embraced. The moment you walk into the courtroom for trial, settlement should be entertained. During all the thousands of moments in between, settlement should be your number one consideration.

Having a settlement state of mind is your greatest gift

Settlement negotiations are not a one-time proposition. Settlement is always your best option, emotionally, financially, spiritually, and psychologically.

And best options should be explored many times. Whenever your mind goes to your dispute, bring settlement into focus. Always. We call this having a settlement state of mind.

In the Beginning

Your first and best settlement opportunity arrives at the get-go when you understand that a legal dispute is in the making. Seize the day and begin planning settlement on one of these platforms:

  • Meet in person and discuss
  • Send a demand letter
  • Engage in Automated Online Negotiation

Meet in Person and Discuss

You are ready to propose a meeting where you and your foe will collaborate on a joint problem. I bet you thought I was going to say the joint problem is your dispute. No, it’s no longer about the past. It is now about avoiding the rigors of what lies ahead, formal dispute resolution.

Your foe probably feels pressured, angry, discouraged, or threatened. These emotions do not provide fertile ground for joint problem-solving or compromise. How do you defuse these emotions and set the stage for conciliation?

Defuse your adversary’s anger and threats and propose teamwork

Call your adversary or send them an email or text. A suggested conversation would be:

We are having a difference of opinion. You feel I’m wrong and I feel you’re wrong. Then surprise your foe. But it is within our power to end this battle before we enter official legal channels. The legal system is very expensive and stressful. If there’s any way we can resolve our dispute, this is the time to do it. Would you be willing to sit down with a single objective: to get past this dispute before its emotional and financial tolls take hold?

You’ve acknowledged there is a dispute, but you are attempting to set it aside temporarily. You want to defuse your adversary’s anger and threats and propose teamwork. Your foe may be sufficiently surprised by your candor and willingness to talk, enough to momentarily set aside the conflict and listen. At this point, you may be well on your way to resolution.

 Questions are Opportunities

Suppose they question your motives? What if you hear: Why do you suddenly want a meeting? Or What makes you think it will change anything? This means they are genuinely interested and want to hear your proposal. Seize your opportunity!

Ask your opponent to come to the meeting without a need to blame or judge

Most likely, your foe wants to get past this conflict as much as you do, if not more so. But they are suspicious and need good reasons for meeting. You’ll give them those reasons. Consider the following proposal:

These legal battles are financially and emotionally draining. Consider the adage: Only the attorneys win in litigation. It’s true. [If this is the next step.] We’ll pay vast amounts of money to our attorneys and must commit precious time and energy to our legal battle. So, let’s make one more attempt to resolve this before we take any further steps.

 Propose a Meeting

Your adversary will most likely respond to this about-face with a willingness to discuss. You should continue, I‘ve got some ideas to share with you. It can’t hurt. How about lunch at                                      . Better yet, offer them the choice of lunch location [and seriously consider picking up the tab].

Smart Cookie Tip: You want them to feel comfortable and if location choice will achieve that objective, let your adversary make the choice.

Ask your opponent to come to this session without a need to blame or judge, but with a single focus on what it will take to conclude the dispute now. This session requires the maturity of participants able to look dispassionately past the dispute to the bigger picture. It encourages compromise simply because it will save the time, money, and emotion of legal procedures. Here, you meet in the middle, rather than bring in third parties who start the resolution tab running.

You’re Solving a Common Problem

If you follow these planning steps, your session can provide a level of comfort and purpose that you have not experienced around this dispute before. Why? For the first time, you and your opponent will have joined to solve a mutual problem (avoiding what lies ahead), instead of fighting each other.

A peaceful, neutral atmosphere is mandatory for optimum success in reaching a settlement

When your foe agrees to meet, you’re ready to set the meeting stage for you and your foe to become a problem-solving team. Three key ingredients make up your stage-setting process:

  • Relax and bring along your personality
  • Select an unhurried peaceful location for your meeting
  • Create a no-fault truce environment

Setting the Stage with Personal Touch

A peaceful, neutral atmosphere is mandatory for optimum success. Typically, high anxiety accompanies the conflict resolution process. Studies show that people in conflict are more uncomfortable and rigid than in any other interaction. When high anxiety hits, courtesy and finishing touches go out the window. We retreat into formality.

With this rigid mindset, attempts at directing your meeting toward a solution dissolve into a rote, dry process too inflexible to work. The solution hides out amid a rigid, stressful atmosphere. There’s no motivation for conflict repair.

During times of conflict, creating a favorable atmosphere is the last thing on our minds. Yet, at these times personal touches need to be retained more than ever. When personal comfort is ignored, conflict is prone to recur or even escalate. This is the exact opposite of the condition you want in your session. After all, you’re there to solve your problem – and theirs.

Create a Peaceful Atmosphere

In a neutral setting, you and your foe will best be able to apply teamwork to solve your mutual problem

Your stage must be set to encourage a relaxed, personable climate. In this neutral setting, you and your foe will best be able to apply teamwork to solve your mutual problem – how to avoid the costs and aggravation of the legal system. The key is to instill comfort and relaxation in the session. That’s what setting the stage is all about. Don’t let the nature of conflict resolution leave these characteristics in the dust. They may be just the thing to trigger a solution.

Creating the Best Ambience

You’ve now set in place the first of three keys to optimizing success. You’ve added the personal touches of courtesy and personality. Now your stage needs to be set with location ambiance.

A carefully selected location creates a conducive environment for effective resolution. What environment puts you most at ease? Choose an ideal location for the meeting. Take this step before you contact your foe to set up the meeting. This location should be a place that will be politically correct for you and your foe.

Smart Cookie Tip: When you contact your foe, suggest the location you have chosen but also ask if they would like to choose the spot.

Pick a restaurant that is light, airy, and spacious, providing the best forum for open discussion. Setting the stage properly bestows your meeting table with all the ingredients for success. A park also is a good, neutral location that doesn’t have to incorporate the distractions of ordering and eating food.

 Make a mutual problem the focus of attention and you will change the program to truce territory

Truce Territory

You’ve set the stage with personal touch and ambiance. Now, creating a Truce Territory makes the ideal setting for resolution. Make a mutual problem the focus and you will change the ambiance to Truce Territory. Within this neutral environment, your foe can become your ally. Consider the following scenario: Your mission is to turn your pre-litigation battleground into a bargaining table.

Think of the stage you have set as Truce Territory for visual reasons. The ego surrounding your dispute will want to rear its ugly head many times during this session. Stress and anxiety are high. Each person is inclined to throw up his hands and say, I give up. Talk to my attorney from now on. Don’t give in to The ego. The ego loves litigation and spares no expense. The ego has no place in Truce Territory.

If ego takes hold, shift the focus back to solving your mutual problem. The legal process is the only enemy – expensive, emotionally draining, and time- consuming. You and your opponent are allied against it.

Each time the ego threatens to take over, remember you are in Truce Territory. You’ve probably discovered that ego doesn’t solve problems – it fuels them. This is particularly true in the middle of conflict. Ego gets very energetic. It’s hard to refocus the stubborn ego and it does take some trickery to do it.

The real enemy at this point is the legal process itself, and its cost in time, emotions, and money

The purpose of your meeting is to calmly create a settlement – not to argue positions. Each time your mind wanders back to the dispute and why you’re right and she’s wrong, breathe deeply and take a momentary time out. Realize that a truce has been called. It’s different this time around and you realize that peace is the answer – and your cost-effective solution.

 Suddenly, You’re Allies!

With these three stage-setting conditions in place, you have created your best chance for a solution. You have a new objective at this meeting: to be allied against a mutual problem. It’s a powerful change. The aim is not to place blame or adopt your old accusatory stances.

The only agenda of this meeting must be to head off the debris of the legal battlefield – bank accounts assigned to attorneys and emotions as they run Rampant – by settling the dispute now. The real enemy at this point is the legal process itself, and its cost in time, emotions, and money.

Send a Demand Letter

Settlement can also be accomplished by writing a Demand Letter to your opponent. You can prepare the Demand Letter yourself or involve an attorney in the process. It should be concise and lay out the reasons why your opponent is Liable for your loss, itemizing and substantiating the damages you are claiming. Ask that $                                 be paid within a specific timeframe, such as 20 days, to be followed by legal action (describe what the next step will be: Small Claims, Mediation, Arbitration, Upper Civil Court) if not paid.

If you plan to hire an attorney but want to keep the cost down, draft the letter and ask your attorney to put the finishing touches on it. Better yet, have your attorney put the letter on their letterhead. The letter should include a provision that the letter is not admissible in any later formal action.

If by your attorney, include a concise but compelling case analysis emphasizing the strengths of your case and the general pitfalls of prolonged litigation. Ask your attorney to project how much each party may spend on attorney fees going forward. It’s only a ballpark estimate but when people are embroiled in adversity, a taste of how much they may spend in their battle can cause even the most ardent fighter to back off. See our Demand Letter Form for a sample Demand Letter.

Engage in Automated Online Negotiation

Automated Online Negotiation (AON) is a novel new online platform like an auction where the prize is settlement. It’s quick. It’s inexpensive. It’s easy. And there is nothing personal about it, such a positive when disputing parties are at odds.

This type of negotiation, referred to as blind bidding, is available to anyone wanting to resolve a legal dispute that can be addressed by the payment of money. It is ideal for matters where liability is undisputed, where the unknown is how much money should be paid. It can also be utilized when liability is unclear to whittle a party’s offer to an acceptable number.

AON could be just the thing to get your dispute resolved at the beginning, in the middle, or at the end, where other processes have failed.

It’s really worth a try. What’s there to lose?

It’s  Do-It-Yourself

And it’s DIY, the perfect solution for the Legal Self-Helper. You and your disputing party can do it without attorneys, mediators, arbitrators, or the court. The usual paraphernalia associated with legal solutions is absent. No presenting your case, posturing, waiting around while everybody gets a turn.

All that’s needed is you and your adversary online not even at the same time, hopefully motivated to dispose of this mess that will undoubtedly disrupt your peace of mind. It’s more like a game that doesn’t require much stratagem other than arriving at price points. It’s not heady, like Chess. It’s more like Bingo. When the numbers line up you’ve got a winner.

Currently, this is how it works. It is all done on an online platform. There are three bidding rounds. Settlement offers hidden by the software are proposed by each party. If the bids come within a predetermined range the automated system selects the midpoint and that becomes the settlement amount, subject to the terms of a settlement agreement provided by these platforms. That’s pretty much it.

Some of these platforms even process payment, right there on the spot. You can do it any number of times throughout your dispute. So simple, yet quite effective since it could easily end the dispute that’s been your number one stressor for years, or could be.

An ADR Agreement Option

Negotiation is one of the optional provisions in our ADR Agreements where in advance of any other proceedings the parties proceed to Automated Online Negotiation. This is a sample provision:

AUTOMATED ONLINE Negotiation: Within 30 days of the date of this Agreement, the parties agree to submit their dispute to Automated Online Negotiation. If a settlement is not reached, the parties shall proceed to the next step under this Agreement.

Providers

AON is relatively new for legal disputes. There are a few private and court- sponsored providers. We expect new companies to spring up in no time at all.

 Private Providers

One private provider is National Arbitration & Mediation. Perform an internet search of automated dispute negotiation or blind-bidding dispute negotiation to locate other providers.

Court-Annexed Providers

AON is new to the courts also. They also see its advantage since it is being implemented in some locales to assist primarily self-represented parties in Small Claims cases so far. It has not reached the Upper Civil courts yet.

This 4-minute video was prepared by the New York courts to explain the automated negotiation process. Remember, this is New York; the laws of your state could be different. This process also provides the option of moving your dispute directly into Mediation if AON fails.

Smart Cookie Tip: See if this platform is available in the forum where your dispute belongs. This is quite a novel innovation for the very traditional court system, so use is spotty thus far.

The courts that do make the negotiation process automatically available make it readily accessible to you. For instance, in some California Small  Claims Courts, once the court receives the email address of all parties, an invitation to online negotiation is sent to each. The parties negotiate themselves via an online chat platform (like texting) and if they feel a mediator is needed, one is invited to the platform. If an agreement is reached before your court date, the case is dismissed.

AS YOUR DISPUTE GOES ALONG

Ideal Times to Detour to Settlement

An ideal time to explore settlement is immediately after you take the first formal step – whether by submitting the case to Small Claims, Mediation, or Arbitration or by filing a lawsuit in the Upper Civil Courts. Your opponent always takes you more seriously after you bring the case before a tribunal. Loss of control is an excellent motivator. When a third party – the court or dispute resolution system – threatens to take part in your dispute, your opponent takes a more serious look at settlement.

Any development in your dispute should trigger an opportunity for settlement. Here are some of the best occasions:

  • Just before the lawsuit is filed
  • Just after the lawsuit is filed
  • At the Case Management Conference
  • When Depositions are sent, before their expense has taken hold
  • Before, during or after a Deposition
  • Before or after Interrogatories, Requests for Document Products or Requests for Admissions are initiated
  • Before or after a Motion is heard
  • Any case change
  • Before trial
  • At trial continuances
  • After the verdict

Our Mediation Coach goes into more detail about each of these pivotal settlement-provoking opportunities.

The Litigation Roller Coaster

The litigation game is an emotional and financial roller coaster ride. The case and each party’s attitude fluctuate as their dispute travels through the

various stages of negotiation or litigation. Each new fact discovered alters the parties’ postures. Like a recipe, each new ingredient changes the taste. As you ride out your legal dispute, one day you feel like the winner; the very next you won’t even have a faint memory of success.

Watch carefully for these pivotal dips. They can be filled with opportunities. These are ideal times for settlement discussions. It’s a time when people feel more vulnerable because their case takes on yet another complexion. Usually, the party in the lead has previously been in the caboose position and realizes that the lead position is short-lived indeed.

Pinpoint Other Settlement Opportunities

As your case evolves through the court system or Arbitration, continually evaluate whether you or your opponent is particularly vulnerable. Remember, whenever a new element is added, your case takes on a new dimension – and yields new reasons to settle.

Any change of circumstance that affects the dispute or the players provides fertile soil for settlement

For instance, when attorneys are hired substantial retainers must be scraped together. People begin to realize the magnitude of how much this is going to cost. This is an ideal time to propose another settlement session.

Be Creative with Settlement Options

Creative negotiations are always excellent tools to bring to your session. You may have achieved the right state of mind, but without settlement options, you may be out of luck.

To resolve your dispute, you will want something of value from your adversary, and it doesn’t have to be money

When you’ve spent time in the dynamic arena of negotiation, you realize the answer is all in supply and demand. What is being demanded, and what can you supply to satisfy the demand? To resolve your dispute, you want something of value from your adversary. Money is the standard way of compensating people. But compensation can come in many forms and many packages. It all depends on identifying a party’s needs. When you do so, you create settlement options.

For instance, you bought a piano from Adam’s Auction Company, and you feel they misrepresented the features. They refuse to refund the purchase price and take back the piano. The next step is to sue them in court. At your settlement meeting with the company president, you discuss alternative proposals.

An agreement is reached: you will give them three months to locate a piano with the features you were promised. As estate furniture auctioneers, they are best suited to find you exactly what you want. This arrangement will probably work out better than getting your cash back in the long run.

Another example: you’re having a battle with your local computer vendor. He says your warranty for hardware doesn’t cover your problem because it’s a software problem. You say it’s not. Instead of taking him to court, ask if he will fix the software problem. You’ll pay him if he can. If he can’t fix it, then it’s a hardware problem and he’ll honor the warranty.

The Magic Word: Barter

Whenever a dispute is in the brew, people are motivated – especially those under attack. If you are the responding party, identify your adversary’s needs. If you are on the demanding side, find out what your opponent is best suited to supply, and see if you can find a match with your wish list. Do you need a new printer? Maybe your adversary has an extra one. Do you need a tenant for your rental property? Maybe your adversary has a tenant for you. The possibilities are endless.

Money is the standard form of compensation, but compensation can be part barter and part money

 

What if you can’t pinpoint the ideal barter for you and your foe?

  • If ready cash is not available, set up a payment schedule. You can offer a discount for early payoff as an incentive.
  • Accept part cash and part services or supplies, or whatever.
  • Accept an assignment of rights. For instance, if your opponent holds a promissory note, she can sign that over to you.
  • Your adversary can stipulate to a judgment to be recorded on their real estate, and you can agree to refrain from collection for a certain time to give them a chance to pay.

There are more ways than you could dream of to come up with a settlement and to structure it. Allow your imagination to work with you on this. You can create your own solution to your problem if you’re innovative.

Settlement is always your best option and should be explored many times over!

If you’ve set your stage well and kept your focus firmly on reaching a solution to your mutual problem – avoiding expensive litigation – you should walk away from your meeting with a settlement. There’s no doubt that you can find solutions you never thought possible, especially with motivated participants.

You can also create your own Settlement Agreement to sign on-site while the fire is hot. Bring your computer and your printer (or forget the printer and sign by a digital signing app). See Settlement Agreement for a sample.

NOW – GO FORGE A FIRST-CLASS EFFORT TO SETTLE YOUR CASE!