Formal Lawsuit vs. Informal settlement

Formal Lawsuit vs. Informal settlement

Wondering what the difference is between a formal lawsuit and an informal settlement? A formal lawsuit begins when a private individual files a civil complaint against another entity, whether it be a person or a business saying that the defendant acted carelessly or irresponsibly in connection to an accident or injury. This is called a “lawsuit.”An informal settlement, which is how most disputes are resolved, comes in the form of negotiation. This negotiation is followed by a written agreement in which both sides forgo any further action and choose to resolve matters with payment of a reasonable amount of money.

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