Court cases are expensive and very time consuming. If you’re a rich enough celebrity, money isn’t a huge deal. Easy to pay less than 1% of your net worth and make a problem go away instead of drawing it out, regardless of guilt

Rule 1. Innocent until proven guilty in a court of law Rule 2. Yeah, probably, but please see Rule 1.

In those types of cases, it is typically made on the decision of cash amount. If a lawyer has a 20+% cut of the financial payout, it can be more profitable to the person accepting the payout than it is to go for a larger sum, but then have to pay the lawyer.

I'm sure there are other reasons on a more technical level, but I've been witness to the above situation before, and that's all it came down to in that specific scenario.

Sometimes it's just genuinely preferable to end the legal proceedings and move on with your life, even if the allegations are untrue. It costs a lot to clear your name legally, both in terms of money and time and stress. Sometimes it's not worth it, and it's less burdensome to simply settle out of court to close the book on it, regardless of "how it looks".

You're conflating two different things. "Guilt" and "innocence" only apply to criminal law. Settling a case only happens in civil courts.

Criminal cases are brought by the government (district attorney), and cannot be settled. The punishments for criminal offenses are fines, community service, and/or jail time (possibly other conditions such as required addiction counseling). If someone is found guilty, they owe their fine to the government. The closest thing to "settling" a criminal case is to take a plea deal, meaning you do admit guilt, usually in exchange for a lesser sentence than you might receive if found guilty at trial. In some cases, the DA might also offer to drop charges if you give them information which leads to a more serious case against someone else.

Civil cases are brought by a third party, and the punishments are generally limited to money. If someone loses a civil case, they owe money to the person who sued them. There is no crime for them to be "guilty" of. Settling a case means they made an agreement with the person suing them, who agreed to drop the lawsuit in exchange for some payment.

It's worth saying that the vast majority of settlements and plea deals don't involve the super wealthy. It's just what you said, cases are expensive and time consuming, both criminal and civil cases. There's another factor though, one that just can't be overstated: they're really uncertain!

A verdict is a giant gamble, even the most solid case might run into some unforeseen event, some crazy and charismatic juror or wacky judge. It's not just the verdict itself though, damages or sentencing can vary widely, and so a lot of the time people just don't want to take chances. If a company can settle a claim without taking the risk of a trial, they usually will, because even a slam dunk case has the potential to blow up.

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There are two major things people who settle want to avoid: huge legal expenses and protracted court proceedings. Even if you are 100% in the right, a trial is always risky. You are relying on another person or people to apply the law rationally and correctly, and people are fallible. By going to court you run the risk of losing, paying more and taking a definitive hit to your reputation, after weeks and weeks of your business being aired to the public. Often the trial process can bring more unfavorable information to light that can damage your reputation.

If you settle, yes you have to pay money but it is less than if you had lost the trial, and the matter is resolved quietly and comparatively quickly with minimal legal fees (compared to the expense of a full trial). Instead of weeks of repeated coverage, there is a day or two of mentions and then the whole matter vanishes from the public conscience.

As an example, most people will remember details they heard from the Depp/Heard defamation trial for years. You probably don’t remember a major celebrity settlement from a year ago. So negotiating a settlement can be a good way to sweep the issue out of the public eye and be able to move on. For celebrities, especially those who have to rely on promoting their work, getting rid of controversies quickly can help ensure the success of their upcoming projects as well, by avoiding a long stint if negative publicity.

> The closest thing to "settling" a criminal case is to take a plea deal, meaning you do admit guilt, usually in exchange for a lesser sentence than you might receive if found guilty at trial.

In most US jurisdictions you can actually "plead guilty" while still maintaining innocence. It's called an Alford plea, and it's basically saying, I didn't do it, but if we went to trial you could probably get a conviction based on the evidence you have, and I'd rather take the plea deal and reduce my sentence.

It's an important thing to allow because you shouldn't have to admit guilt if you aren't guilty, but you also deserve the same ability to reduce your sentence as somebody who pleads guilty. Why would you want to accept a sentence when you are innocent? Well, the system isn't perfect. Sometimes the police fixate on the wrong suspect and fail to investigate everything. Sometimes the evidence is misleading. And while the law requires proof beyond a reasonable doubt, sometimes genuinely unreasonable things happen.

The settlement of a civil case typically includes a provision that neither party admits liability. Have you ever been involved in a significant lawsuit over a large sum of money? You can easily spend hundreds of thousands of dollars on a lawyer, or a team of lawyers and sometimes more. You can easily spend hundreds of hours a year with these lawyers or on your case. You may have to turn over personal documents such as health and financial records to the other side. Plus there is significant worry and stress. If you are a rich celebrity and can write a check and make it go away, many will do that, even if they aren’t liable.

There is nothing like innocent or guilty in civil lawsuit.

In a civil lawsuit you can only be find liable or not liable.

You can only settle in a civil lawsuit and the reason to do so is very simple. It's cheaper and faster.

It just isn't worth it to fight the lawsuit. The damage to your reputation might not recover even if you win the lawsuit. Even if you can prove defamation you can only get money if the other party have it. So you are most likely not going to get much from them.

So rich people and companies will rather pay you the 10% or so they would have spend on lawyers to have you go away.

You underestimate how expensive fighting can be.

Lets say that someone comes along and accuses you of a workplace sexual misconduct situation. You own the company, so there's no risk of being fired. But there's a public reputation element that could cost you customers in the long run. You know you didn't do it, but proving that is difficult. It becomes a situation where they are accusing you, and you are denying it but neither side really has a lot of evidence one way or the other.

Public opinion would be against you, and that could have negative ramifications for your career even if the accuser eventually loses in court. Court records are public, so IF it goes to court everyone is going to know what you have been accused of.

You sit down with your lawyer. They tell you that the legal fees would likely be in the $250,000 range if it goes to court. In addition you estimate that you would lose $10,000,000 in business by customers dropping you because they don't want to be associated with someone who's accused of that.

Then, if you lose, you'd likely have to pay the accuser an additional $10,000,000. So there's no scenario where if you take this to court you don't lose at least $10,250,000 but could be as much as $20,250,000.

You offer the ex employee $1,000,000 to just drop the whole thing, and they agree.