From: How Stuff Works
How do lawyers settle cases before going to trial?
Is it really less expensive?
This article has some insightful information.
Settling out of court is far less expensive than a trial. Unless you know for a fact that you have an ironclad case, you stand the risk of spending large amounts of money and getting nothing in return. No satisfaction, no restitution, nothing. The best first step of any potential lawsuit is to try to work out your disagreement outside of court. The courts agree with this wholeheartedly and in some states require some sort of dispute resolution before you can even bring a case to trial. Even if you do have an ironclad case, you need to weigh the costs of litigation with the potential award you might (or might not) get after a trial.
Here are some ways you can try to resolve your dispute without involving lawyers and large sums of money. You have three general paths to take to avoid the court room.
First, you should try a good old-fashioned face-to-face conversation with your adversary. Is he even aware of the problem? Does he acknowledge responsibility? Have you tried to come to an agreement about how to remedy the problem? You may be surprised at how reasonable the person is. If you do come to an agreement, you should probably have it documented and each sign it with witnesses present. And it’s best to have an attorney draft it up to make sure you haven’t left any loopholes.