Last week, I wrote about the settlement option for auctioneers facing legal claims. We considered some basic reasons that might merit an early resolution of a claim. We then looked at several points that would weigh against settling instead of fighting. This week I want to end this topic by addressing a handful of bedrock principles about addressing legal claims and close by showing how these points bear on deciding whether to pursue settlement to curtail a claim early.

I don’t know where all the time went, but I have been practicing law for more than 30 years.

Here is a smattering of some of the most important points that I have gained about handling claims and sometimes settling them.

These principles apply equally whether you are an auctioneer or involved in some pursuit far afield from crying bids over sale lots.

First, let’s begin with this understanding. When a legal claim is made against a target, the target has come under attack. That’s what a claim is - a non-violent, legally recognized form of attack which is intended to extract something of value from the target of a claim for the benefit of the claimant. Recognizing this, it is essential for a target who is the subject of a major claim to make the claim a priority of the first order and handle it accordingly - and not simply as some ordinary and mundane matter.

Second, the successful management of a legal claim requires courage. When attacked, a lot of people instinctively duck and seek cover. That is exactly the wrong course for defending a legal claim. A sound claim response requires that a target have a real backbone and show it to the claimant. It is essential for the target to show that it will not be anyone’s punching bag and, instead, has the strength and conviction to vigorously hit back hard against any attacker. A senior attorney who was a terrific litigator once told me when addressing this very point, “There would be a lot fewer turkeys killed every year by hunters if the birds carried guns and knew how to shoot.” I have seen weak and fearful defendants settle a lot of claims way early in the process, but I have never seen one that was proud of being frail, timid, or cowardly.

Third, intelligence is another critical feature in successful claims management. A target must possess and exercise intelligence in order to figure out the two sides’ respective weaknesses and strengths, as well as determine how to use each of these points to advantage. The target will need all the shrewdness and wits available to map a battle plan that will serve as the strategy and road map for defending against a claim. In the process, the target will identify, muster, and deploy its resources in execution of the defense strategy. A key for success for the target is to be able to discern when circumstances are right to sustain an all-out battle, as opposed to when it is more appropriate to pursue settlement of the claim.

Fourth, discipline is another essential with great value in handling claims. It is essential for a target to exercise close discipline to ensure emotions stay in check at all times so thoughtful action can be taken, while stress-triggered reactions are avoided. I keep a quote on my desk that says it nicely: “In times of stress, we are prone to make mistakes.” That is true and we must be ever mindful of it in order to avoid making those errors.

Fifth, the capstone to a winning approach for handling claims is determination. A target must have the grit, capacity, and drive to see the battle through to a successful conclusion. When Paul “Bear” Bryant coached the Crimson Tide of Alabama, he once faced a downtrodden team that was trailing at halftime. Bryant was chagrined to see his players looking demoralized and defeated with half the game yet to be played.

“Look at you. You boys look like whipped pups!” he said. “You got your heads down feelin’ sorry for yourselves. Some of you might be thinking about quitting,” the coach continued.

“You know, if you quit now, it’s gonna be hard for you to make that decision, because I’ve taught you the importance of never quitting. But if you do quit, there will come another time when you feel beaten and you will want to quit again - and it won’t be near as hard to do the next time, because you already quit once before. And it you quit twice, there will come another time when you want to quit and then it will be easy to do - because that’s what you will have become - a quitter, and that’s what you’ll be for the rest of your life.
“Men, there are no quitters on this team only champions. Hold your heads high and go play like what you are.”

Winners in handling claims exhibit grit and determination to see the matter through to a successful conclusion. They refuse to be cowed and, instead, stand strong in the face of adversity and work diligently to accomplish a goal that will yield a successful, or at least palatable, result.

So what do these points about handling claims have to do with claims settlement? Each is a critical ingredient in successful claims management and they collectively point to the fact that claims are best settled from a position of strength and not weakness. Indeed, settlement is rarely a desirable option for a weak defendant. Settlement only becomes a good option after a defendant has whittled away the strength of an adversary’s position, while building and fortifying his own position with strength. When a claimant begins to fear a target, the opportunity to settle a claim on acceptable terms begins to mature for the target.

Work hard to avoid claims. That’s what the real winners in business do. Nevertheless, if you are ever hit with a large demand, remember these points and employ them to your advantage to protect your important interests - and work to settle a claim only when your position is strong enough to make that a viable option for success.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Steve Proffitt may write to him in care of this publication.