5 Ways to Settle a Lawsuit
I have practiced law for more than a decade and litigated numerous lawsuits. I’ve learned firsthand what it takes to settle a lawsuit. You’ll almost never convince the other side that their case is weak. Instead, you have to convince them that it’s in their economic interest to settle a lawsuit. Here are the top five ways to do that.
One: Prevailing party fees
I litigate a lot of contract disputes. When a client first comes to me about a contract dispute, I first glance through the contract to see if it provides for prevailing party fees. This means that the loser pays the winner’s attorney’s fees. This provision scares both sides, but especially the one filing the lawsuit. Not at first though. At first they’ll be convinced that they will win and that the fee provision is of no concern. However, almost no case is without warts. Once the other side starts to see the warts on their lawsuit, they get more concerned about the prospect of losing and having to pay your fees. Periodically remind them of this. This usually results in the other side folding sooner than they otherwise would and taking less in settlement.
Two. Disclose your asset protection trust
A Missouri domestic asset protection trust, if formed properly, provides really good asset protection. Importantly, assets owned in a DAPT are generally immune from seizure by judgment creditors. Let the other side know that your assets are owned by an asset protection trust. You can usually settle a lawsuit earlier and for less money by making this disclosure.
Three. Disclose liens on your property
Let the other side know that your major assets are securing various financial obligations. This will likely be a big disappointment to them, and it is one of the most effective ways to settle a lawsuit.
Four. Tell the other side your business has few assets
This is another great way to settle a lawsuit. When possible, try to periodically distribute cash and property out of your business, perhaps to your asset protection trust. However, you have to do this well before you have any inkling of a potential claim against the business. Otherwise, the transfer might be deemed fraudulent, which would not be good for you.
Five. Disclose you carry no business liability insurance
Plaintiffs love defendants with liability insurance. It means the plaintiff will get paid if he or she wins. If you don’t have liability coverage, disclose it. An absence of liability insurance almost always deters litigation or leads to an early settlement of a lawsuit. I’m not suggesting that you forego liability insurance, as there are many benefits to having it. But if for whatever reason you don’t have it, use that to your advantage in this instance.
Take-Away
Use these tactics only if what you tell the other side is true. First, it’s the right thing to do. Second, you’ll never get a good second shot to settle a lawsuit if you’re caught lying about your financial condition. By prudent asset planning, you can put yourself and your business into situations where you can truthfully represent one or more of the above situations. Hopefully that will help you settle a lawsuit.
The information provided in this article is for educational and informational purposes only. It is not intended as legal advice. You should consult an attorney experienced in this area of law about how the information in this article might apply to your specific circumstances.
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© 2016 Michael Sewell
Contact Michael Sewell at (314) 942-3232 or at michael@SewellLaw.net.
