Settlement Reasonableness From Negotiations To Coverage Disputes

Introduction

An important decision in litigation—one no doubt informed by an understanding of the evidence and relevant legal issues—is how to evaluate the settlement value of a case. This decision will generally come up first in evaluating a case and will typically become more prominent when a party considers making a settlement offer or deciding whether to accept or reject an offer from an opposing party. There may also be additional instances in which the size of a settlement will be considered, such as when a potential acquirer evaluates the purchase of a company with outstanding legal issues, or if the size of a proposed settlement leads to a coverage dispute between the insured and its carriers. Consequently, many parties have a desire for a methodology for estimating settlement values that is both accurate and convincing.