Advantages of out-of-court settlement

 

Trust Maanda
Legal Position

 

LITIGATION is one way of resolving disputes.

 

But it has its own disadvantages, and must be resorted to when all other means of resolving a dispute have failed.

Litigation has a way of damaging relationships, tarnishing reputations, and eating up enormous sums of money, time, and talent.

There are now many alternatives to litigation that can stop lawsuits, resolve long-standing disputes, and even produce win-win solutions to old and bitter wrangles that can leave both sides battered.

 

It is normally a winner-takes-all affair in litigation.

 

There is no win-win situation where protagonists are fighting.

Ordinarily one measures costs of litigation as just lawyers’ fees and other direct costs.

 

But there are other hidden costs that come as indirect business costs of litigation.

 

The cost of diverting key personnel from productive activities, for example, are equally important and perhaps more than the costs in lawyer’s fees.

 

Leaving one’s work to go to court and spent productive time away from one’s business is costly.

Litigation can be so acrimonious that the cost of destroying a profitable relationship with a business ally, may be too great to be calculable.

The high cost of resolving disputes is caused by mindset which came about by the adversarial system.

 

The essence of this system is that lawyers have the responsibility to present every piece of evidence and make every legal argument that might possibly benefit their clients.

By their training and professional duty, and frequently by client expectation, attorneys tend to take hard and fast positions in defence of their clients and exploit every loophole to the disadvantage of the opposing party.

Lawyers have an obligation to be as zealous an advocate as possible, even to the detriment of resolving conflicts to the satisfaction of their client.

The problem with the adversary method in civil cases is not the most effective way to resolve some kinds of disputes. There is therefore need to avoid litigation where this is possible.

There are other means of resolving dispute like dispute resolution alternatives to traditional litigation have been around for many years, but Alternative Dispute Resolution (ADR) as a formal technique and an accepted business practice emerged in the 1970s.

Handled with sufficient skill, an out of court settlement can bring all parties to join in a non-adversarial search for a mutually beneficial outcome.

An out of court settlement has obvious advantages.

It saves time.

 

Litigation can stretch for years.

 

A party can appeal to the High Court from a decision of the Magistrates’ Court.

 

He/she can further appeal to the Supreme Court from the decision of the High Court.

 

If a constitutional matter arises from the matter, a further appeal or constitutional matter may be raised with the Constitutional Court.

This means that a remedy is delayed for all the years the matter is before the court.

An out of court settlement may preserve value.

 

Where the law and currency change without warning, values can be lost.

Imagine you are suing for one million United States dollars, and action is pending for five years and in the meantime, currency is changed or is devalued.

 

If you ultimately win, you are ultimately the loser, if the money by the time you receive it would have lost its value.

 

It is better to accept an offer of less than you are claiming than pursue the claim in order to get all the amount you claim, only to lose it all.

 

Time is money.

Out of court settlement creates a win-win situation.

 

Both parties may agree to give and take. Both parties will reach a compromise thereby gain from the exercise.

Out of court settlement obviously saves money.

 

The costs of litigation are prohibitive.

 

Lawyers do not come cheap.

 

There is no need to pay litigation lawyers where parties can settle their dispute without litigation.

Lawyers can be involved in settling cases, but the cost of long drawn-out disputes far exceeds the costs of settling.

Because litigation is mostly acrimonious, out of court settlement saves relationships.

 

Litigants may not be doing business together while they haggle in court.

 

Settling the matter preserves relations.

In out of court settlements, parties can control the outcome of their disputes.

A matter that is litigated upon has no certainty.

 

Parties are not judges.

A judge may shock you by an unexpected decision.

 

Many things happen in the dispensing of justice, besides the fact that a judge may honestly be wrong in their finding or understanding the law.

Judges, being human, may err.

An out of court settlement preserves privacy.

 

Private contract and deals will not be out in the open for people to see, if a matter is resolved away from public glare.

Parties are encouraged to settle their disputes. Where litigation can be avoided, it should be avoided at all cost.

Trust Maanda is a legal practitioner and a partner at Maunga Maanda And Associates. He writes in his personal capacity. He can be contacted on +263772432646.