3 Stages of Negotiating a Settlement

  1. Litigation
  2. 3 Stages of Negotiating a Settlement

Are you working with a lawyer on a case and wondering about the stages of negotiating a settlement? Maybe settlement is a possibility in your case and you want to know what to expect. Maybe you have just begun litigation and are curious how a settlement might occur. There are three main stages of reaching a settlement with the other parties involved in your case: initial investigation, making settlement demands, and reaching a settlement agreement.

  1. Initial Investigation

If you and your lawyer decide that settlement might be a possibility in your case, the beginning step is doing an initial investigation. Whether you are a plaintiff, a defendant, or a party in a dispute that has not been filed in court, the initial investigation could be crucial for evaluating settlement.

What is an initial investigation? You and your lawyer will work together to investigate the claims made in the case. If you are the plaintiff or the person making claims against someone else, you will gather evidence to support your claims. If you are the defendant, you will look for evidence rebutting the plaintiff’s claims. Your lawyer may review documents, interview witnesses, inspect the scene, or take other steps to locate important evidence.

The evidence you and your lawyer collect will help your lawyer evaluate the strength of your case. Your lawyer will look at previous settlement demands in similar cases, his or her experience and knowledge of this area of law, and other factors to see if settlement makes sense.

  1. Making Settlement Demands

When settlement is a possibility, typically your lawyer or the other side’s lawyer will reach out with a settlement demand. As discussed above, the strength of your case is one factor that influences the amount demanded to resolve the matter. Other factors include settlements in other cases, the parties’ relative positions if the case goes to court, and how much money is available (through insurance or savings) to pay a settlement.

If you receive a settlement demand, you should talk to your lawyer about how to respond. Accepting the first settlement demand is not always the best option. You may want to make a counteroffer or reject the demand altogether. This will depend on your lawyer’s evaluation of this first demand, as well as other factors described above. Sometimes, you will exchange demands and counteroffers several times.

  1. Reaching a Settlement Agreement

At some point in the negotiation process, you may decide to accept a settlement demand, or the other side may accept your demand. At this point, your lawyers will prepare a settlement agreement to resolve the claims. Settlement agreements typically require you to sign away your right to pursue future related claims against the other parties in exchange for a monetary payment and/or dismissal of the lawsuit.

Sometimes, the parties decide to pursue mediation or arbitration to resolve a case. Mediation is an alternative dispute resolution method that involves a mediator helping the parties to exchange information and settlement demands. If a dispute is resolved during a mediation, then the mediator often will assist the parties with preparing and signing a settlement agreement on the spot.

During the three stages of negotiating a settlement, parties work closely with their lawyers to evaluate their cases and reach an agreement with the other parties. If you are involved in a dispute or litigation and need legal help, reach out to a lawyer. Business lawyers like those here at Henke & Williams, LLP can advise on business disputes, business divorces, and related issues.

Litigation, Settlement, and ADR Law Firm

As experienced Houston business lawyers, we assist our clients with litigation, settlement, and alternative dispute resolution matters. Our clients look to us for business divorce advice and more because we tailor our assistance to your unique situation. To set up a consultation, call 713-940-4500 or use our convenient Contact Form.

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