The strategic advantage of settlement: Why resolving litigation early often makes sense

30 October, 2025 | Natalie Miller

In the realm of civil and family litigation, the decision to settle a dispute rather than pursue a judicial outcome is often framed as a tactical choice—one that balances risk, cost, time, and emotional toll. While litigation may promise vindication through a formal judgment, settlement offers a pragmatic path to resolution that can be more aligned with the parties’ broader interests, and far more economical.

Speed and efficiency

One of the most compelling reasons to settle is the speed of resolution. Court proceedings are notoriously slow, often stretching over years due to procedural delays, scheduling conflicts, and an overloaded court system. In contrast, settlement negotiations can conclude much faster (sometimes within weeks provided all of the relevant information is available). This then allows parties to move forward without prolonged uncertainty, and avoids the additional costs and delays associated with litigation.

Cost-effectiveness

Litigation is expensive. Legal fees, expert witness costs, discovery expenses, and court filing fees can quickly accumulate. In practice, it doesn’t take long for parties to express concern about escalating costs where the litigation is ongoing. This prompts lawyers to explore settlement avenues that preserve resources while still achieving acceptable outcomes. Settling out of court significantly reduces these costs, making it a financially prudent option for many parties.

Emotional and psychological relief

The adversarial nature of litigation can be emotionally draining. Parties may experience stress, anxiety, and frustration as they navigate complex legal processes. Settlement offers a more amicable and controlled environment, reducing emotional strain and fostering closure.

In relationship and family disputes, such as separations, will challenges or estate litigation, settlement can also preserve relationships and reduce hostility—an important consideration when parties are family members, long-term associates or need to have a continuing relationship (i.e. as co-parents).

Confidentiality and privacy

Some court proceedings are public, and sensitive information disclosed during litigation becomes part of the public record. Settlement agreements, however, are typically confidential, allowing parties to resolve disputes discreetly and protect reputational interests.

Control over outcome

Unlike litigation, where a judge determines the result, settlement empowers parties to craft their own resolution. This control allows for creative solutions tailored to the specific needs and interests of both sides. For example, in estate disputes, parties may agree to compensation terms, access to personal items, or future entitlements that a court may not be able to order.

Risk mitigation

Litigation is inherently uncertain. Even strong cases can falter due to evidentiary issues, judicial discretion, or procedural missteps. Settlement eliminates the unpredictability of trial outcomes and guarantees a known result. Judges themselves often encourage settlement to reduce caseloads and promote efficient justice delivery.

Some matters can’t be settled

Despite its advantages, settlement is not always appropriate. If a party seeks to establish legal precedent, vindicate rights publicly, or believes the opposing side is acting in bad faith, litigation may be the better path. Additionally, if the settlement offer is inadequate or the dispute involves complex legal issues requiring judicial interpretation, proceeding to trial may be justified.

The take-away

Settling litigation is not a sign of weakness—it is often a strategic decision that prioritises efficiency, cost savings, emotional well-being, and control. While each case must be evaluated on its merits, the benefits of settlement frequently outweigh the risks of trial.

Want to know more?

If you have a civil or family dispute (or potential dispute) and would like to become a client of Smith and Partners to get guidance about how best to navigate that dispute, please contact Natalie Miller at natalie.miller@smithpartners.co.nz or phone 09 837 6843 or fill out the form below to set up an appointment.

We will require a retainer to be paid prior to your first meeting, and we cannot assist with legal aid matters. Please note that, in accordance with our obligations under the Lawyers and Conveyancers Act 2006, we cannot provide legal advice unless you have become a client of Smith and Partners and have received our Terms & Conditions of Engagement and Info for Clients.