Quote:
Originally Posted by bgalbrecht
Sometimes they settle because they believe the settlement will cost them less than what it will cost to defend themselves.
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Yeah. I used to know some people who had a small factory. Their largest competitor sued them with false charges. They decided to fight the charges, rather than settle, and the expenses nearly bankrupted their company. They eventually won on all counts, but didn't get enough in compensation to cover all their legal fees. The owner of the other company who made the false claims said that they were planning on trying to bankrupt them, and that using frivolous lawsuits were cheaper and more effective at killing the competition than simply trying to outperform them in the market. By settling, you end up paying out only a fraction of what you could spend on lawyers, even if you have a 100% chance of winning. Courts are slow, and their are all sorts of tricks that people can do to drag things out, to increase your costs.