Many people understand that numerous lawsuits settle right before trial, and often, right before the beginning of jury selection or other preliminary stages of trying a case. I always wondered why parties would wait until the absolute last minute to settle a case when they might have spent months or years litigating a matter at the cost of many thousands of dollars. Earlier in my career, I settled a case right before jury selection while the parties were in court, and the experience gave me some insights.
Pressure
Throughout the course of a case, the parties do not really have much pressure on them to settle. Sure, they will face mounting legal fees as a matter drags on, but clients can pay this over time, and this makes it less likely that fees will have a massive impact on a client’s decisions. Moreover, throughout the course of the case, parties might not need to interact with a judge or even come to court since most depositions and other pretrial matters are conducted outside of court.
At trial, clients are confronted with the probability that they will be hit with a huge bill since trials are exhaustive and require all of counsel’s time. Additionally, interacting with a judge can be a daunting experience for parties (not to mention, many lawyers), and a trial is the time when reality breaks in and parties understand that they are going to need to testify in front of members of the public and face other indignities of a trial. I once saw a party decide to settle a case immediately before a trial upon seeing the reality of members of the public who could have been jurors starting to pile up outside a courtroom. The pressure felt right before a trial is unlike anything else experienced in litigation.
Everyone Is Together
In many cases, the trial is the first time that all of the parties to a case and their counsel are assembled at one time. A deposition is usually only attended by the party being deposed, and motion hearings usually only involve counsel. Sure, some cases involve mediations or settlement conferences, but even in the aftermath of COVID-19, many of these sessions are being held remotely, which can affect the impact these sessions have.
At trial all of the principals and their counsel are in the same place, at the same time. This makes it easy for the back and forth of settlement demands and offers. Sometimes, it can takes weeks for parties to exchange settlement numbers, and right before trial, this process can take a matter of minutes. When it comes time to memorialize the terms of a basic settlement, the parties can easily put a statement on the record, sign a brief writing, or agree by email to the essential terms. The ease with which parties can settle right before trial makes this an ideal time to resolve matters.
Exhaustion
The process of preparing for trial can also put the parties and their counsel in a good position to settle a case. Parties need to perform time-intensive tasks leading up to a trial, including motions in limine, compiling jury instructions, drafting a jury verdict sheet, preparing witnesses and other tasks. Depending on the tasks, the parties themselves need to be closely involved with these steps since they often need to be prepared for trial, provide feedback about motions, and participate in other ways.
By the time counsel and their clients get to trial, they might be genuinely sick of litigating and are eager to put the matter behind them so that they can move on with their lives. Trials require substantial brain space and time, and sometimes the parties and their counsel view settlement as a more preferable option, even if they are not getting everything they want in a resolution.
In any event, trials are a unique part of litigation, bringing all of the stakeholders to a lawsuit together and putting pressure on parties and counsel in different ways. As a result, matters are usually ripe for settlement right before the parties begin to try a case.
Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothman.law.
