In what circumstance does litigation occur?

Litigation typically arises in situations where all other methods of dispute resolution, such as negotiation, mediation, or arbitration, have proven ineffective. When parties are unable to reach an agreement or find a resolution through these alternative channels, they may resort to litigation as a means to address their grievances through the judicial system. This process involves filing a lawsuit to seek a legal remedy, which may include monetary damages or specific performance.

Choosing an alternative resolution method, such as mediation, suggests that the parties are still working towards an amicable resolution without involving the courts. Settlements agreed upon by both parties indicate that they have reached a resolution without needing litigation. Similarly, a decision by the insurance company to settle is a proactive step to avoid litigation, not a trigger for it. Therefore, recognizing that litigation is the result of failed attempts to resolve disputes through other means underscores the context and process of how and why parties ultimately turn to the courts.