Plea Bargains and Settlements

Plea Bargains and Settlements

The vast majority of cases, both civil and criminal, never go to trial. I've heard statistics saying that fewer than 5% make it that far.  Instead, the parties to the dispute arrive at an agreement beforehand.

In criminal trials, the agreement is called a plea bargain.  In a plea bargain, the defendant pleads guilty to a lesser charge in return for a lower sentence.  Some plea bargains occur because the defendant doesn't want to risk a guilty verdict on a more serious charge, while the prosecutor doesn't want to risk getting no conviction at all.  Other plea bargains occur as compensation for testimony in another case.  For instance, the prosecutor may be sure he can convict a defendant on drug dealing, but he might let the dealer plead down to mere drug possession if he testifies against a drug lord.  Any plea bargain must be approved by a judge, and the judge can reject a plea bargain he disagrees with.  But this rarely happens. 
In civil trials, the agreement is called a settlement.  In a settlement, the defendant makes a payment to the plaintiff for dropping the case.  A settlement usually occurs because the defendant doesn't want to risk a large judgment at trial, while the plaintiff doesn't want to risk getting nothing at all.  Unlike in a plea bargain, the defendant does not admit to any wrongdoing. 
In both plea bargains and settlements, both parties to the agreement are trading uncertainty for certainty.  Both parties realize that the trial could lead to a very good or a very bad outcome.  Rather than risk getting the bad outcome, each party accepts an intermediate outcome instead.  Naturally, a party who thinks the good outcome is more likely will demand more concessions in the plea bargain or settlement, while a party that thinks the bad outcome is more likely will be willing to concede more.  Given most people's aversion to risk, it is not surprising that settlements and plea bargains happen as often as they do.