top of page

The Dangers of Confidential Early Negotiated Settlements

I have always distrusted "settlements" done outside of the court system. Usually there is an imbalance of power, and the weaker party is pressured to take the settlement in lieu of stiffer penalties, or less money resulting from court proceedings.

- Jill Goldhart, Retired Legal System Expert, Ohio.

For decades, courts have supported and preferred negotiated settlement processes such as arbitration and mediation.

The favoritism of settlement is consistent with the view that litigation serves as a dispute-resolution mechanism. Under this view, bringing peace to the parties is paramount…The dispute-resolution model fits well with the perspective of litigants, who control most aspects of litigation, including whether and when they settle. Litigants, both actual and prospective, have strong incentives to settle because the costs of litigation so outweigh the costs of settlement.

But this court settlement preference may be based on several myths:

  • Americans are litigious

  • Courts are overcrowded

  • Judges are overburdened.

Myth: Americans Are Litigious

There is a common misconception that the U.S. is the most litigious nation in the world. This is simply untrue. While it’s true that the U.S. has a large number of lawsuits crowding its courts each year, it barely cracks the top 5 of most litigious countries in the world.

In his book, “Exploring Global Landscapes of Litigation,” Christian Wollschlager notes that the litigation rates per 1,000 people shows that European nations top the list of the world’s most litigious countries.

1. Germany: 123.2/1,000

2. Sweden: 111.2/1,000

3. Israel: 96.8/1,000

4. Austria: 95.9/1,000

5. U.S.: 74.5/1,000.

The top 10 also includes the UK (64.4); Denmark (62.5); Hungary (52.4); Portugal (40.7); and France (40.3).

People who asset this litigious myth continuously cite the 1994 Liebeck v. McDonald’s spilled coffee case. Most do not know the real facts. 79-year old Liebeck did spill the overly hot coffee, burning 6% of her body. She demanded $27,000 from McDonald’s to compensate her medical expenses. McDonald’s refused to settle. The case went to the jury who awarded her $2.7 million. She eventually got $600,000.

  • That torts cases in the United States have dropped by a quarter over the past two decades.

  • Only 10% of the injured in the US file a claim for compensation.

  • Only 2% ever file a law suit.

  • From 1993 to 2021, the rate of violent victimization declined from 79.8 to 16.5 victimizations per 1,000 persons age 12 or older.

  • About 46% of violent victimizations were reported to police in 2021, higher than 2020 (40%).

  • Only 310 out of every 1,000 sexual assaults are reported to police. That means more than 2 out of 3 go unreported.

  • Only 32.5% of household property crime is reported to the police.

Myth: The Courts Are Overcrowded

There seems to be little information to support this assertion.

United States Supreme Court:

In 1980, SCOTUS heard over 150 cases; today, only about 80 despite 5-7,000 filings.

State Supreme Courts:

  • In Alabama, in 2011, the court disposed of 1654 cases; 2021, 1028.

  • In Ohio, in 2011, the court disposed of 2263 cases; 2021, 1532.

U.S. Federal Courts:

The following is a summary of key findings for the year ending March 31, 2022:

  • In the U.S. courts of appeals, filings decreased 7 percent.

  • The bankruptcy appellate panels reported that filings fell 7 percent.

  • Filings in the U.S. Court of Appeals for the Federal Circuit dropped 15 percent.

  • In the U.S. district courts, filings of civil cases declined 33 percent after rising 39 percent the previous year in response to multidistrict litigation filed in a single district court.

Filings for criminal defendants grew 9 percent. The U.S. bankruptcy courts received 16.5 percent fewer petitions.

Cons of Early Settlement Without Judges and Juries

The negative aspects of this early settlement process are many:

  • Bad behavior by corporations, governments, and people is not exposed or changed.

  • It is unclear whether the allegations actually occurred.

  • Are people settling just to get it over with but they are not guilty?

  • Are people pleading guilty because they are threatened with a worst deal but they may be innocent?

  • Do these early settlements promote spurious claims?

Con: Over Criminal Charging in Anticipation of Plea Bargaining, aka Negotiation

One fascinating, possibly largely unnoticed “con” of the high criminal settlement rate is overcharging.

What is Over Charging?

According to Wikipedia:

Overcharging, in law, refers to a prosecutorial practice that involves "tacking on" additional charges that the prosecutor knows he cannot prove.[1] It is used to put the prosecutor in a better plea bargaining position. The term has been defined in different ways. Alschuler writes that "to prosecutors, overcharging is accusing the defendant of a crime of which he is clearly innocent to induce a plea to the 'proper' crime.

Defense counsel identify two types of overcharging. 'Horizontal' overcharging is the unreasonable multiplying of accusations against a single defendant. He may be either charged with a separate offense for every technical criminal transaction in which he participated, or the prosecutor may fragment a single criminal transaction into numerous component offenses.

'Vertical' overcharging is charging a single offense at a higher level than the circumstances of the case seem to warrant."[3] Vertical overcharging is deemed to be the more abusive of the two practices.[4] In defense of overcharging, it has been argued that in order to obtain a plea bargain that results in a lower sentence than the prosecutor's original position, while still obtaining a penalty that promotes public safety, the prosecutor must select an initial charge higher than is penologically appropriate.

So, in a case, where the charge should be sexual harassment, the person is charged with sexual assault. The charging agent knows that this will most likely be settled so this overcharging gives them bargaining power. But, possibly the unanticipated result begins in the bond or bail hearing. In a sexual harassment charge, the person might be released on their own recognizance but not in a sexual assault case.

The police often overcharge. In what could have been a single charge like reckless driving, the police file five charges, again, in hopes of increased bargaining power.

EXAMPLE: In the District of Columbia, the people value their “green;” that is, their trees, bushes and grasses. They so value this that the Council has passed a law protecting old trees that they call “heritage trees,” even on private property. In a 2023 case, a developer is accused of poisoning two heritage trees by inserting poison via small holes in the trunk of the tree. The developer disputes this claim but nonetheless paid $144,000 to settle this claim as “a business decision.” The developer wants to avoid bureaucratic delays and points out that the monies paid supposedly go directly to the green effort. This negotiated amount does not seem to be a deterrent to multi-million dollar development corporations.

EXAMPLE: A non-profit organization fired two employees with AIDS/HIV. They did this strategically so that they could say to their prospective insurance provider that as far as they knew they had no employee with this affliction. Both employees sued, but being somewhat desperate for money they settled confidentially out of court. Although the employer did pay some money, most would say that is was unfair and neither the specific employer nor other employers learned the lesson. Local news did cover these stories beginning the coverage with excerpts for the celebrated movie Philadelphia.

EXAMPLE - ACTRESS GWYNETTH PALTROW: Skier Terry Anderson, a retired optometrist, filed a $300,000 civil suit against actress Gwyneth Paltrow claiming that she skied into him resulting in “permanent traumatic brain injury. She counter-sued and claimed the opposite. (Anderson had originally filed a $3.1M lawsuit against the resort, the ski instructor, and Paltrow but this was dismissed by the court.)

She could have easily negotiated a settlement to avoid reputational harm. She is personally worth $60M and her company Goop is valued at $250M. She has decided that this is worth fighting to save her reputation.

According to Fox News:

Healthcare attorney Harry Nelson, founder and managing partner of Nelson Hardiman, told Fox News Digital that celebrity status can often be a reason why people pursue litigation.

"The unfortunate reality is that there are many plaintiff attorneys and plaintiffs out there who view personal injury litigation opportunistically, and will see a defendant’s deep pockets or fame as a reason to sue or to seek much higher amounts than they would otherwise. It’s part of the price of celebrity and wealth," Nelson said.


Washington Post: In total, 25 of the largest police and sheriff's departments spent more than $3.2 billion to resolve claims of police misconduct over the past 10 years.

Human Rights Watch, Legacy:The strongest cases presented by victims of serious abuse are often settled by a city to avoid embarrassing attention; in such settlements, the department rarely acknowledges that an officer was in the wrong. Often, parties are sworn to secrecy regarding the amount of the settlement or information about the officer that may have been disclosed during the process

The first reaction may be relief that these cases are settled and surely the families affected welcome the funds. Families may feel that there is accountability, but consider this:

  • Do these settlements encourage many other lawsuits, even frivolous ones, thinking that whether it has merits or not, some funding will be paid out?

  • Attorneys usually only take the strong cases, are other cases thrown “under the rug.”

  • Do the city, the police department, or the police officers really know what happened or how to prevent this happening in the future?

2023:Philadelphia to pay nearly $10 million to settle 2020 police misconduct suit. This is to settle a class action suit with human rights groups who allege that the department abused hundreds of black folks during a social justice 2020 demonstration. The city will pay 343 plaintiffs and contribute $600,000 to Bread and Roses Community Fund, a mental health service for victims of police violence. In late 2020, the City Council banned police from using tear gas, pepper spray, and rubber bullets on protesters. Did the police department of the officers involve learn any lessons?

Many blame police misconduct on the training, but it may be a combination of factors starting with recruitment. Who is attracted to policing? Alpha males? Veterans with gun experience? Legacy? Is it also the culture aka social validation (all my police brothers do it, so….).


Advice Columnist 79 year old E. Jean Carroll has sued Donald Trump for sexual assault and defamation from the 1990's. She is allowed to do so based on a new New York law: Adult Survivors Act allowed decades old allegations to be filed.

She probably could have settled but she declares this to be "settling a personal score, not a political one." She was motivated by the MeToo Movement.

Twenty six women have accused Trump of sexual misconduct, but none have gone to trial.


Former Tesla employee Owen Diaz decided not to settle but instead rely on a jury verdict.

A San Francisco federal jury has ordered Tesla to pay $3 million in punitive damages and $175,000 in economic damages to Owen Diaz, a former elevator operator at the company’s factory in Fremont, California, after he endured a racially hostile work environment during his time at the company.

Diaz, a Black man, was hired as a contract worker at Tesla in 2015 through a staffing agency…after a jury determined Diaz had suffered civil rights violations at Tesla, and that the electric vehicle maker failed to take all reasonable steps to end and prevent the racist harassment.

Diaz wanted to make Tesla an example.

Con VS Early Settlement: The Bijan Ghaisar v. US Park Police, $5 Million

This April 2023 settlement (yet to be approved by the judge as of this blog writing but probably will be) of this case is unsatisfying to most. It does not answer “the why's” and does not provide any lessons to prevent future similar travesties.

In 2017, 25 year old Bijan Ghaisar, who had no criminal record, was driving on the George Washington Parkway in the DC area. Traffic was snarled. An Uber driver rear-ended BG. The law requires for accident-involved people stay until police arrive. BG took off in his jeep. Park Police were called and pursued. BG pulled over twice but then drove away. Park Police finally blocked him and began shooting 10 shots, which killed him. They only found marijuana in his card.

It is a mystery why he drove off several times. Maybe the presence of marijuana?

It is a mystery why the Park Police, supplemented by the Fairfax County, VA, police felt threatened and fired shots. Seemingly, police training asserts that if one is to shoot, one shoots to kill resoundingly by many shots.

Until recently, the Park Police had no cameras.

The state attorney general did not consult with the family before dropping all charges. VA legislature passed a law to require this step in the future.

The family remains frustrated and distraught.

Advantages of Early Settlement

Interests of the Minor Child-Settlement Confidential.

EXAMPLE: Actor Alex Baldwin Shooting Case-New Mexico

The judge hearing the wrongful death lawsuit against actor Alec Baldwin and an array of producers and crew linked to a fatal film set shooting agreed Monday to seal from public view the terms of a proposed settlement agreement in the case that benefits the son of slain cinematographer Halyna Hutchins.

The New Mexico judge said the right to privacy for Hutchins' 10-year-old son overrides obligations for public disclosure and ordered that settlement documents and approval hearings be sealed in the civil lawsuit that argues that Baldwin and other film crewmembers ignored industry gun safety standards on the set of the Western film “Rust" ahead of the 2021 shooting.

“What is driving my decision is really the interests of the minor child. And that is one of the very most powerful reasons to seal a matter,” District Court Judge Bryan Biedscheid said.

Goal Accomplished-Settlement of Dominion v. Fox News Case.

This $1.6 billion defamation case was settled on Aprilm18th, 2023 on the brink of the trial for about half ($787.5) of the amount. This settlement literally happened “on the courthouse steps” after the jury had been impaneled and the litigators were prepared and ready to go. Dominion called victory, declaring their mission had been accomplished by exposing the falsehoods (declared by the judge) that Fox had publicized during the 2020 Presidential election. In addition, the amount was allowed to be publicized. This is a significant amount, since Fox’s net income during 2022 was $1.2B. During the depositions, there was bombshell after bombshell of Fox celebrities saying one thing in their emails and another on air, quite contradictory. This settlement provides incentives for Fox election reporting to change, maybe putting up some guardrails against blatant falsehoods.

Dominion is one of the main (37%) election technology providers allowing fair and accessible voting results.

Fox News is an ecosystem for a target audience. Some wonder whether Fox is more opinion than news.

At one point, the state of Delaware even sanctioned Fox News for hiding information and appointed a special attorney to further investigate misrepresentation. The sanction allowed further depositions with Fox paying for such.

Dominion Lawyer Stephen Shackelford on MSNBC, 4/19/2023: "Note that Dominion did not settle last year. We wanted the documents demonstrating the falsehoods to be public which they were. Hundreds of documents were presented. Money is accountability. This was the largest defamation settlement in history. We were after the truth. This case was about deliberate lies, not mistakes. We were not after a forced apology that does not mean much."

Defamation suits are usually risky and challenging because the person defaming often has no money whereas Fox had deep pockets. The second challenge is to prove economic hardship and actual malice.

The downside to early settlement is that there are no apologies from the Fox personalities. There are other similar lawsuits against Fox pending such as Smartmatic (Los Angeles County, CA) suing for $2.7 billion.

Dominion also has pending defamation lawsuits related to false claims about the 2020 election against Newsmax Media, One America News Network, Overstock founder Patrick Byrne, My Pillow CEO Mike Lindell, former Trump lawyer Rudy Giuliani, attorney Sidney Powell, and others.


Surely, there are advantages to early negotiated settlements such as protecting minors and after goals have been accomplished. Early settlements often save much time and money. (The Dominion v. Fox case was estimated to consume six weeks.) Maybe this still leads to a court or legal system’s preferences for such agreements.

At the same time, there should be precautions. Will early confidential settlements allow wrongdoing to continue with no consequences?


See Recommended Books under “Blogs” drop down menu. Clicking on any book will lead one to the discounted Amazon site.

Roy J. Lewicki is the author of 'Essentials of Negotiation', published 2015 under ISBN 9780077862466 and ISBN 0077862465. Publisher: McGraw Hill Higher Education

The Conflict Resolution Training Program, Leader’s Manual, ISBN: 0-7879-6077-2. Prudence Bowman Kestner and Larry Ray

5 Languages of Appreciation in the Workplace.

Getting Your Way Every Day.


bottom of page