The vast majority of legal claims never reach a civil court trial. Most cases are resolved earlier through a negotiated settlement amongst the parties. Negotiated settlements can be reached through informal settlement discussions or through more formal mechanisms such and mediation or arbitration. Through a settlement the plaintiff a agrees to give up the right to pursue any further legal action in connection with lawsuit in exchange for the payment of an agreed upon sum of money from the defendant.

Prior to entering into any settlement, both sides must consider the following points:
  • The value of the case in a range of dollar amounts.
  • Verdicts and settlements in similar cases.
  • Chances of winning at trial.
  • Unfavorable publicity for either side.
  • Amount of personal information that could be revealed at trial or through further discovery.
  • Possible disclosure of business information or trade secrets.
  • When the case is likely to be called for trial.
  • Practical difficulties in trying the case.
  • Weaknesses in your evidence.
  • Weaknesses in your opponent's evidence.
  • The amount of the defendant's insurance coverage.
  • The defendant's own monetary resources.
  • The defendant's negotiation tactics.
  • The chance of becoming personally liable for the other party's fees and costs.
  • How much of the settlement proceeds will be applied to your fees and your expenses.
  • How the settlement proceeds will affect your federal income taxes.

Both parties should discuss with their attorneys what they are willing to concede in order to get the case settled. Plaintiffs should know beforehand the minimum amount they would accept to settle the case. Although money damages are the usual remedy, plaintiffs should also consider accepting a remedy other than money.