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This is not always the case, you often incur far more costs to your legal team than you will ever be able to recover from your counterparty. There is still some uncertainty in every legal case, being convinced that you are legally right is not the same as being certain that you will win the case. If you do lose such a case, the costs can rise considerably. By settling you just know where you stand. You can then free your legal team from that case.
Such a lawsuit can in any case cause a lot of hassle with information that ends up on the street.
Of course, that does not mean that as a company you will always settle, but there are certainly cases that a company settles even though they think they would win the case.
On the other hand, if you settle, you will of course never admit guilt. That would be absolutely insane, especially in such a case where other parties could report as injured parties. This is often an explicit part of the settlement in order to limit future damage.
