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Blog post

Robin Musch

2 min read time

July 1, 2026

Litigate or settle: what is the sensible choice?

Litigating or settling — a strategic choice between litigation before a judge or arbitrator and negotiating an amicable settlement. In our practice, we see entrepreneurs making decisions based on intuition. A structured assessment often yields a better outcome: litigation trumps principles, while settlement saves time and cash. Both options have their place, provided they are substantiated by figures and a risk assessment.

What are the legal implications?

The choice depends on the strength of the case, financial interest, costs, time, reputation, and commercial relationships. Internationally, these factors become more intense. Litigation risks vary by jurisdiction. Settlements require creativity and cultural sensitivity. A misjudgment leads to expensive proceedings or substandard compromises.

What steps are you taking?

Build a Litigation Risk Memorandum in advance. Quantify the probability of success, costs, lead time, feasibility, and alternatives. Determine your BATNA (Best Alternative to Negotiated Agreement) and your WATNA. Explore the Zone of Possible Agreement with the opposing party. Under Dutch law, Article 87 of the Code of Civil Procedure encourages settlement talks; the judge may refer parties to mediation. English law features the Without Prejudice rule, which makes settlement communication confidential.

What risks and costs do you face?

Litigation leads to high costs (lawyers, experts, time investment), uncertainty regarding the outcome, and the risk of enforcement. Settling without preparation leads to unnecessarily high compensation. Reputational damage can work both ways. In international disputes, there are additional costs for translation, local lawyers, and travel. Without a strategy, even a successful legal proceeding can result in a net loss.

How did a client handle this?

We represented a Dutch company with an 800,000 euro claim against a Spanish party. Estimated litigation costs: 200,000 euros, three years, 70 percent chance. We organized ICC mediation. A settlement of 600,000 euros within three months, preserving the business relationship and significantly reducing management time. Net result substantially better than successfully litigating — and without enforcement risk under Article 36 of Brussels I-bis.

What is your first action?

Conduct a structured analysis: chance of success, costs, time, commercial relationship, reputation, and possibility of enforcement. Align with internal stakeholders. Consider mediation as an intermediate step under the Mediation Directive (2008/52/EC). Establish a zone of possible agreement in advance. Document offers for later arguments regarding litigation costs under Article 237 of the Dutch Code of Civil Procedure. See also our article on What does international litigation cost?

Frequently asked questions

When is litigating wiser than settling?
Litigation is more advisable if the case is legally strong, the stakes are substantial, the opposing party is unwilling to settle, or if a precedent for future cases is important. For strategic principles or setting an example, litigation can have value in addition to a direct outcome. Combine with urgent measures under Article 254 of the Dutch Code of Civil Procedure (summary proceedings) where necessary to exert pressure.
What is a no-prejudice conversation?
A no-prejudice conversation or letter is a settlement proposal that remains confidential and cannot be used in the proceedings. It is firmly established under English law (Cutts v Head, 1984). Under Dutch law, similar rules apply regarding compromise attempts. Explicitly state the status in correspondence and conversations to ensure protection.
Does mediation work internationally?
Yes, especially in commercial disputes where parties wish to maintain a future relationship. The ICC, NAI, JAMS, and SIAC offer international mediation. Since the Singapore Convention 2019, mediation settlement agreements are enforceable worldwide in signatory states. Tailor the mediation clause to confidentiality, mediator selection, and time limits for effectiveness. Would you like an independent assessment for your ongoing dispute? Schedule a no-obligation strategy session via muschlegal.nl. Musch Legal – your specialist in international commercial law.