September 17, 2017 Articles

How to Determine and Demonstrate the Reasonable Settlement Value of Your Case

The settlement of a lawsuit, reduced to its essence, is a purchase and sale transaction

By Douglas L. McCoy

In negotiations attempting to settle any lawsuit, the plaintiff offers its opportunity to try its claims and to receive the amount (if any) the plaintiff would be awarded after a trial. The defendant, on the other hand, proposes to purchase a plaintiff’s right to try its claims. Both parties, by their settlement negotiations, seek to buy their way out of the uncertainty inherent in almost all litigation. Of course, the value of the rights being offered and potentially purchased by a settlement is not “preestablished”; rather, it will only potentially be “fixed” by discussion and debate if that debate ultimately leads to mutual agreement. And reaching a mutually agreed upon settlement value is where the challenge lies—a challenge that can be made more achievable by using the methodology proposed in this article.

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