The Risk of Litigation

Written By: Gadtke & Beyer, LLC | Published On: 20th August 2010 | Category: Divorce Process | RSS Feed

            Most divorce cases reach a final settlement short of a contested court trial.  Sometimes the parties’ split is amicable enough that they are able to work out the details of the settlement entirely on their own.  If the parties have retained lawyers, the assistance of legal counsel is usually required in order to eventually agree on settlement terms.  When the parties and lawyers are not able to settle a case on their own – despite their best efforts – many cases can still be settled with the assistance of a skilled mediator.  When all attempts at settlement have failed, only then does the court decide the matter following a trial.

            Often times, however, divorce litigants do not fully appreciate the benefit of settling a case compared to the risk of proceeding to a contested trial.  When the parties settle a case, they have the collective ability to control the final terms.  There are no surprises.  They know exactly what they are getting.  At a trial, though, all control is lost.  The Judge alone makes the final decision on all contested issues.  For this reason, it is important to do a risk assessment and compare the other side’s most recent offer to what could potentially happen after a trial.  Remember that settlement negotiations are inadmissible at trial.  Just because the other side has made a certain concession during settlement discussions does not mean they will make the same concession at trial.  In fact, they probably won’t, and you cannot tell the Court about the prior concession during a trial.

            You should determine, then, what the weak points are in your case.  Is it possible that the Court could issue a ruling that is less favorable to you compared to the other side’s most recent offer?  If so, you should seriously consider settlement.  It’s a classic case of a bird in the hand is worth two in the bush.  I recently encountered this issue with one of my clients.  My client made an offer to receive spousal maintenance for a period of five (5) years.  (In reality, the client probably would have accepted even less than that, had the other side made a counter-offer).  The other side did not want to pay spousal maintenance at all, though, and a settlement was not reached.  We communicated to the other side that we would be seeking permanent spousal maintenance at trial if the parties were not able to settle, as we believed that the facts warranted a permanent award.  The other side did not appreciate their exposure on this issue, and the case proceeded to trial.  Since the other side was not offering any spousal maintenance at all, my client had little to lose by going to trial (other than attorney’s fees).

            Following a trial, the Court awarded my client permanent spousal maintenance.  The other side was blind to the fact that this could happen.  They were so adamant about not paying spousal maintenance at all, that they did not realize that maybe they should accept an offer to pay only five (5) years of maintenance – even though they didn’t want to – if it meant avoiding a permanent obligation.  In this case, had the other side accepted my client’s prior offer, they would have experienced “short term pain” in exchange for “long term gain.”

            In the end, with the assistance of your lawyer, you should ask yourself these questions:  Can you “live with” the other side’s offer?  What are the risks of going to trial?  Could the result of a trial be worse for you compared to the other side’s offer?  What are your weak arguments?  If the other side refuses to budge at all from an unreasonable position, then you may have little choice but to proceed to trial.  If both sides are smart, though, they should recognize the risk of litigation and offer mutual concessions.  If both sides operate this way, the chance for settlement increases greatly.  This eliminates the unknowns that can come from a Judge making all the decisions for you.  The settlement might not be exactly what you wanted, but you know exactly what you are getting and have eliminated the risks associated with litigation.     

by Marcus P. Beyer

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