When is it better to settle?

There is a saying among trial lawyers: ‘Tis better to have litigated and lost than not to have litigated at all.’
Another such dictum, among the same community, holds that, ‘you learn more from the cases you lose than the cases you win’. A further rumination sometimes articulated is that ‘a settlement is like a fantasy soccer team, you never get to see how it would have played out’.

Therein lies the perceived problem with trial lawyers; they are a self-serving bunch who are primarily in the business of trying cases not settling cases. I say ‘perceived’ problem, because it is not actually true. I cannot speak for the plaintiff’s bar, being unashamedly a defence lawyer, but from the standpoint of the trial lawyers who defend auto manufacturers and component suppliers, I can say this. The interests of the client are paramount in all things; there is simply no conflict.

Issues of whether to settle, when to settle and most of all on what terms to settle, are driven by the usual
conventional factors, the merits, risk assessment, costs, client priorities such as precious management time, and sometimes even client politics. In any case, these can be some of the most difficult judgments. And that is before you encounter some of the other, more compelling factors, peculiar to our sector. Frequent among these is that old peril, the ‘known concern’ and its close cousin, the repeat
failure case.

Suppose that you used to produce a component which required an enhancement. Suppose it was a simple
lubrication device which needed (for argument’s sake) a different nozzle profile to create a wider lubricant spray pattern. This ingeniously simple modified part was deployed in OEM production and rolled into the aftermarket through the repair and servicing cycle. So far, so good. Fast forward a number of years and the first claimant appears. And so it begins.

Oddly, he has the modified part. He also has a specious expert’s report which suggests that the modification was unsuccessful. You are right and he is wrong. But it might be tempting to pay him off. Tempting, but not risk free. Settle bogus claims and you risk a far greater hazard; as the French say - ‘pour encourager les autres’. Suppose your claimant is an internet warrior. The next thing you know, every other motorist from here to Honolulu is trying to take you to the cleaners. What was but a niggling little non-problem is now the bane of your very existence. The art of settlement is indeed a fine one. Perhaps
dentistry would have been an easier career choice after all.