Streiten oder Vergleichen?

Diese Frage wird einem Anwalt bei arbeitsrechtlichen Streitigkeiten sehr oft gestellt. Die Antwort ist nicht einfach und es gibt kein “One-Size-Fits-All” Konzept. In dieser Folge sprechen Ralf Peschek und Dorothea Arlt über verschiedene Faktoren, die bei der Entscheidung, ein Gerichtsverfahren zu beginnen und allenfalls bis zum Ende durchzuhalten oder sich mit der Gegenseite zu vergleichen, eine Rolle spielen. Sie erläutern, welche Aspekte ArbeitgeberInnen berücksichtigen können, um objektiv beurteilen zu können, ob ein Vergleich finanziell bzw. aus sonstigen Gründen vorteilhaft ist und geben dabei viele spannende Einblicke in die Beratungspraxis als RechtsvertreterInnen vor Gericht.

Als weiterführende Lektüre zu diesem Thema empfehlen wir Ihnen den Artikel von Ralf Peschek in ecolex.

Battle or settle?

Episode summary

This question is often asked of lawyers in employment law disputes. There is no simple answer, and there is no “one-size-fits-all” solution. In this episode, Ralf Peschek and Dorothea Arlt discuss various factors that lead employers to initiate court proceedings and either carry them through to the end or settle with the opposing party. They explain what aspects employers should consider to objectively assess whether a settlement is financially or otherwise advantageous and also provide many fascinating insights into legal practice as representatives in court.

Financial considerations

The starting point for considerations on whether it is worthwhile to proceed with a lawsuit or try to obtain a settlement is to put a price tag on the litigation risks involved and the expected value of a settlement.

There are legal proceedings where a specific amount is sought. In such cases, the financial extent is easier to measure. In employment law, however, disputes often revolve around challenging terminations. In these instances, no specific amount is claimed. If an employee challenges their termination, the relevant starting point is the remuneration that would have to be paid between the end of the employment relationship and the judgment of the court of first instance. Other relevant factors, for example, are whether the employee in question has a special protection against termination, legal representation costs involved, and a potential reimbursement of legal costs to the prevailing party.

Probability of success

The probability of success in a specific case is also a relevant aspect with regard to a potential settlement. For example, the probability of success can be influenced by the facts of the case and what might be considered to be “true”, evidence, witness testimony, legal arguments or an element of fairness.

In addition, judges can have significant influence on the assessment of the likelihood of success, as well as on the duration of proceedings. Some judges will reveal their thinking already at the first hearing. Others do not give away their line of thought until the final hearing.

Other factors to be considered

Time is another key factor. Generally, as time passes, parties can lose interest in a judgement for various reasons. For example, the employee has found another job and wants to leave the dispute behind. However, in some instances, court disputes last for years due to their complexity, if there are numerous witnesses or if the litigation strategy of the parties involves multiple aspects and stages.

The willingness to settle is often quite low at the beginning of proceedings, when the parties have put forward their arguments and feel armed. During the course of the proceedings, the arguments by the other party may also be strong and the dispute can go from being a black and white issue, to one with different shades of grey. The perception of the dispute by the parties, and hence their willingness to settle, may change as the proceedings unfold.

Some parties to a dispute can be very aggressive, others are in fact not that interested in fighting and only use court proceedings as a means to an end.

If a court case has the possibility of becoming a precedent-setting one, an employer should weigh the chances of a favourable decision more thoroughly. If the outcome ends up being in favour of the opposing party, this will have an impact on the outcomes of similar pending or future cases.

Moreover, legal advisors also play an important role in the likelihood that a dispute may be settled out of court. Parties usually choose legal advisors that match their posture. This often leads to reinforcing elements, for example in terms of the will to make peace, or the desire to argue.

As further reading on the topic, we suggest this article by Ralf Peschek on ecolex (in German).