The Sunday Mail
Out-of-court settlements refer to legal agreements reached by parties involved in a dispute or lawsuit without the need for a formal trial or judgment.
In such settlements, the parties involved negotiate and resolve their differences privately, usually with the assistance of their attorneys or mediators. Instead of proceeding with a lengthy and potentially costly trial, the parties agree to a compromise or resolution that is acceptable to all involved. This agreement typically outlines the terms, conditions and actions to be taken by each party to settle the dispute. However, it is important to note that out-of-court settlements are voluntary agreements, and both parties must willingly agree to the terms proposed.
Out-of-court settlements can occur in various types of legal cases, including civil disputes, personal injury claims, employment disputes and contract disagreements.
They offer several potential advantages, such as saving time, reducing legal expenses, maintaining privacy and allowing the parties to have more control over the outcome of the case.
Before rushing to litigate or defend one, always ask your legal advisers to give you an honest opinion, especially on whether your case has merit.
If there is no merit, you need to explore possible ways of settlement. If you have been given advice by your lawyer, you need to learn to take it. Do not over-consult.
A number of times, clients visit a lawyer intending to compare opinions from previous consultations. This can add confusion to an otherwise simple matter. Hire advisers you can trust and also learn to trust their advice.
Six benefits of out-of-court settlements
There are several advantages of out-of-court settlements:
- Time and cost savings
Out-of-court settlements can save significant time and money, compared to going through a full-fledged trial. Court proceedings can be lengthy, involving multiple hearings, discovery processes and potential appeals. By reaching a settlement, parties can avoid these time-consuming and expensive aspects of litigation. Legal fees are by no means insignificant. Even for a corporate, it may be in their best interests to settle matters they know have no merit. If you lose, the court can also order you to pay the costs incurred by the other side. If the costs are punitive (attorney-client scale), you may need to brace up for a serious financial knock.
- Control over outcome
In an out-of-court settlement, parties have more control over the final outcome. They can negotiate and tailor the terms of the agreement according to their specific needs and interests.
This flexibility allows for more creative solutions that may not be possible in a court judgment, where decisions are made by a judge. Once a judgment or order is out, you are at the mercy of the winning party. There is also no guaranteed outcome on appeal. The uncertainty of litigation should shape considerations on whether or not you should settle out of court.
- Privacy and confidentiality
Settling a dispute out of court helps maintain privacy and confidentiality.
Court trials are generally open to the public and sensitive information may become part of the public record. You have read about divorce proceedings in newspapers. Most of the time, none of the parties would have “leaked” the news to the media. The press is always looking for “juicy” stories and your matter may just be the one. Once papers are filed in court, they are public.
You also cannot sue for defamation when a newspaper has simply reproduced your submissions before the court. Parties can keep details about the dispute confidential by resolving it privately, which helps protect their reputation and business interests.
- Preservation of relationships
By avoiding a contentious trial, out-of-court settlements offer an opportunity to preserve relationships between the parties involved.
Litigation can often strain personal or business connections, but through negotiation and compromise, settlements provide a chance for parties to find common ground and maintain working relationships.
- Certainty and finality
Once an out-of-court settlement is reached, it typically brings a final resolution to the dispute. Parties can move forward with confidence, knowing the terms of the agreement and avoiding the uncertainty of trial outcomes, future appeals or prolonged legal battles.
- Flexibility and customisation
Settlement agreements can be tailored to meet specific needs and interests of the parties involved. This flexibility allows for creative solutions that may address underlying concerns beyond monetary compensation. Parties can agree on non-monetary terms like apologies, changes in behaviour or future business arrangements to resolve the dispute.
Out-of-court settlements may not always be suitable for every situation.
The circumstances and nature of the dispute should be carefully evaluated, and it is advisable to consult with legal professionals to determine the best course of action.
LEGAL DISCLAIMER: The material contained in this article is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the article. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.
Arthur Marara is a corporate law attorney practising law in Harare. He is also a notary public and conveyancer. He is also passionate about labour law, commercial law, family law and promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media: (Facebook Attorney Arthur Marara), or WhatsApp +263780055152 or email [email protected]
