Understanding the Difference Between a Settlement and a Lawsuit

The thought of taking legal action against another party can often be a distressing time. After all, no one wants to unnecessarily go to court. However, there are times when it’s necessary, especially when justice needs to prevail and right the wrongs against you via legal remedy. This is particularly important if you’ve been injured or your property damaged because of the negligence of another.

Knowing what legal action to take is often best left to legal professionals, so hiring one at the earliest possible convenience is vital. A legal professional will be able to provide you with the necessary support and ensure deadlines for filing paperwork are met so that you can proceed with legal action. 

Legal professionals will also be able to advise you about the most appropriate action to take based on your individual circumstances. If you’re considering legal action, this article may help you understand the difference between a settlement and lawsuit. 

What is a Settlement?

A settlement is an agreement made between the victim and the party said to be at fault. It is reached, or made, outside of court. A settlement is often the preferred course of action to take as it saves both sides money in court fees and time this would inevitably take. They can also be reached at any time during a personal injury claim, regardless of before or after a lawsuit has been filed. So if you had filed 

However, settlements are not straight-forward. It can only be agreed upon when the evidence is clear and compelling that the defendant is negligent, or at fault. For instance, imagine if you were injured and your car was damaged by another party when driving. You had the right of way because your traffic light was green, yet a nearby car ran a red light causing the car accident. The other party may opt to settle out of court, especially if there is compelling evidence to prove they were negligent, like witnesses or CCTV. This could potentially help them to avoid additional court costs and lawyers fees that would inevitably arise from the matter being heard in court.

Aside from compelling evidence, insurers or other defendants may opt for a settlement merely because of the costs involved in taking a matter to court. They may also want to avoid negative publicity or paying an overwhelming amount of compensation out. 

What is a Lawsuit?

A lawsuit is a formal legal complaint that is filed by one party at court about the negligence of another (the defendant) that has caused them harm. If we use the car accident example in the previous section about settlements here. You may decide to file a car accident lawsuit if the defendant refuses to accept liability for the injuries you’ve sustained or the damage caused to your vehicle. By filing a lawsuit, you are requesting legal remedy from a court by requesting they hear your case and reach a decision, hopefully, in your favor. 

However, filing a lawsuit isn’t solely for the purposes of taking action if the defendant refuses to accept liability. One can also be filed for nonpayment of court decreed compensation or if they’re offering a sum that isn’t what you truly deserve to receive in consideration of your injuries, for instance. By filing a lawsuit, you are effectively initiating trial proceedings.

Some lawsuits can be resolved via settlements whereas others require litigation. This allows both sides to make representations to a court. A judge or jury will make a decision about whether the defendant was negligent and thus liable for damages. They will also decide how much  should be awarded based on what evidence they’ve heard.

Lawsuits require a lot of work, as does litigation. This can lead to an increase of legal costs, which is why, in the case of personal injury claims, they are often a last resort. Although, they will ensure that a full and fair settlement is reached for the purposes of the person taking this course of action.

Should I opt for a Settlement or Lawsuit?

You should always seek legal counsel in this regard. A lawyer will be able to advise you about what legal redress is best for you when considering the details surrounding your matter. They will also take into consideration the response of the defendant or insurance company when deciding the best way to proceed. 

If we once again refer back to the example of the unfortunate event of being involved in a car accident, your lawyer may opt to file a lawsuit if the defendant’s insurance company is unwilling to pay out what your lawyer feels you deserve to cover loss of earnings, as you’re unable to work, or cover medical expenses, for any rehabilitation or medication you need. 

Each individual case has to be decided upon their unique merits. Approximately six million car accidents occur in America per year, meaning over sixteen thousand occur per day. Some of these may end up with a lawsuit being filed or a settlement being made, whereas others may not even get this far. It all depends upon the individual merits of each incident.

A settlement and lawsuit are two different types of legal action that can be taken. The former can usually help you avoid attending court and result in your matter being resolved quicker. The latter often leads to a court hearing. Receiving advice from an experienced legal professional will help you make the right decision and could help you save on expenses that court fees inevitably accrue. Their advice can help you explain the differences and make the right decision for your individual case. 

Remember, what’s right for another matter may not be applicable to the unique factors of yours, so be prepared to listen to what your legal representative advises as any reputable lawyer will have your interests at heart and before anything else. They’ll also be prepared to explain things so you understand and are able to make an informed decision, so don’t be apprehensive about asking questions. The chances are, they’ll be happy to talk over the relevant laws concerning your case.