Weighing Litigation Versus a Pre-Litigation Offer

There are several important factors to weigh in deciding whether to accept an offer of settlement, prior to filing suit, or filing and proceeding to trial. These considerations are: (1) economics (cost), (2) time, and (3) upside/downside.

The cost of filing suit may include an increased contingent fee percentage paid to the plaintiff’s attorney. Contingent fee agreements often provide for an increased percentage of the gross recovery if it is necessary to either file suit, or actually try the case, depending on the language of the fee agreement. Naturally, the plaintiff’s attorney is doing more work litigating the case, than if the case settled prior to filing suit, so although this increase is logical, it still stings and must be considered when pondering a reasonable pre-suit offer of settlement. Other costs of litigation include, filing fees, deposition costs (court reporter, etc.), expert witness testimony (often very expensive), travel expense for the lawyer, plus other expenses.

Litigation can also be a very lengthy process. In certain jurisdictions it may take years to get to trial, and although getting to trial in other jurisdictions may be faster, other time consuming considerations, which are more difficult to define, include difficulty obtaining service on the defendant, and delays by the court. Also, time-wise, the litigant should consider the amount of time the litigation process takes out of his or her life, for depositions, answering interrogatories, and for the trial itself.

Finally, a plaintiff needs to calculate the potential upside versus downside of proceeding to trial. Is the case realistically really worth more than the pre-suit offer, when you take into consideration the increased fee, costs and time involved in attempting to gain what you perceive to be a more reasonable offer? Maybe, but you should discuss this question with a qualified attorney who is familiar with local jury verdicts and the trial system, before making this important decision.

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