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Deciding whether to settle or litigate enforcement actions

Author

Listed:
  • Raisner, Sara

    (Partner, Allen Overy Shearman Sterling LLP, USA)

  • Bhatia, Parul

    (Associate, Allen Overy Shearman Sterling LLP, USA)

Abstract

All parties facing the risk of an enforcement action must make the difficult decision of settling the charges or fighting them in litigation or an administrative proceeding. Both options provide distinct advantages and disadvantages. By settling, a party can resolve charges without admitting or denying the allegations and can minimise public coverage of potentially lengthy litigation and trial. But litigating, while stressful and expensive, can end in public vindication or even a novel change in the law that could be advantageous to a defendant’s business or industry. Parties are motivated by different factors. For some, the primary goal might be limiting public scrutiny and reputational damage, while for others, the decision making is driven by a cost calculation weighing the prospective costs of a trial and potential damages against the costs of an anticipated settlement and potential penalties. Is there ever a right case to litigate? What factors should a party carefully examine when making the decision of whether to settle or litigate? And how do recent challenges to the power of Administrative Law Judges impact the analysis? This article provides an overview of principal considerations that parties facing an enforcement action should keep in mind as they evaluate whether to settle or litigate, especially during a climate in which regulatory agencies and administrative proceedings are facing increasing programmatic and reputational pressure. This article is included in The Business and Management Collection (https://hstalks.com/business/).

Suggested Citation

  • Raisner, Sara & Bhatia, Parul, 2025. "Deciding whether to settle or litigate enforcement actions," Journal of Financial Compliance, Henry Stewart Publications, vol. 8(4), pages 359-364, June.
  • Handle: RePEc:aza:jfc000:y:2025:v:8:i:4:p:359-364
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    More about this item

    Keywords

    regulatory enforcement; civil enforcement; administrative proceedings;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K2 - Law and Economics - - Regulation and Business Law

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