Something must have gone wrong before parties commence civil litigation, whether they arise from breach of contract, unpaid invoices, or differing interpretations of terms etc. As civil litigation is costly, time-consuming, unpredictable, and at times excruciating, it is not uncommon for parties to compromise their case, and to settle the civil dispute midway in the proceedings.
After years of advising and settling civil disputes, it is hoped that this series can shield light on the dos and don'ts for parties when they enter into settlement negotiation, and when they eventually sign and execute the settlement agreement.
However, what are the relevant factors in play in deciding whether settling is the right move?
One crucial, but often overlooked, factor is the human costs involved.
- Opportunity costs of scarce resources and time invested in the litigation
Aside from financial resources, litigation demands time, emotional energy, and focus, often pulling one away from family, work, or health. Especially for private clients, it is no exaggeration that litigation is like their "second job".
The energy, finances, and focus devoted to a prolonged legal battle may detract from other personal or professional opportunities, making settlement a strategic choice to reclaim those resources and redirect them more productively.
Settling a civil dispute could therefore provide peace of mind to one, allowing you to reclaim your life sooner and to prioritize over other aspects of life.
- Interest of family members and loved ones
In deciding whether to settle a case, one important factor to consider is the interest of family members and loved ones, who may be deeply affected by the litigation's demands. The emotional strain, time commitment, and financial pressures of continuing the case could place a heavy burden on relationships, often making settlement a more compassionate option to prioritize their well-being and restore balance.
For instance, a parent with a young child requiring funds to study abroad may be willing to accept a lesser but immediate settlement sum, in the hope of improving the financial situation of one's household for upcoming needs.
- Harmony among family members or business partners
It is essential to acknowledge that litigation severely damages the harmony and trust once built among family members or business partners.
The litigation process often unearths painful accusations, long-term grudges, and divides loyalties, leaving behind a legacy of resentment and fractured bonds. Testifying against one another in Open Court marks a point of no return, as parties are usually destined to part ways forever.
Settlement could therefore serve a viable path to prioritize reconciliation and preserve the relationship over the adversarial toll of litigation.
- Prevention of emotional turmoil
The uncertainties and risks of litigation bring huge amount of stress to the litigants, especially the case of private client. It is not uncommon to see litigants suffering from insomnia in the nights leading up to trial or even being diagnosed with mental disorder thereby warranting therapy and medication.
Moreover, bringing up sensitive details and trauma into open trial may heighten the emotional turmoil for the litigant involved. The public exposure of personal struggles and traumatic experiences could intensify distress. It would be difficult for a litigant to move on to the next stage of his/her life if he/she is required to testify in open Court the past trauma and be exposed to intimating cross-examination from the opponent's counsel.
The stress and anxiety may make settlement a preferable option to alleviate this burden and promote mental well-being.
Conclusion
In deciding whether to settle a case, the human costs of litigation, encompassing the opportunity costs of scarce resources and time invested, the interests of family members and loved ones, the potential disruption of harmony among family members or business partners, and the need to prevent emotional turmoil must be carefully weighed. These factors highlight the profound personal toll of continuing a legal battle, often making settlement a more humane and practical option to mitigate these impacts and foster a healthier resolution for all involved.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
