Many employees receive a severance too low than what could actually be achieved.
This uncomfortable reality in employment law is rarely spoken openly, yet it affects countless workers facing dismissal.
Severance Too Low: How Incentives Shape Outcomes
Lawyers are usually paid regardless of the concrete outcome. Whether the final severance is €15,000 or €45,000 often does not change their fee significantly.
This leads to rational behavior:
- quick solutions are preferred
- risks are reduced
- proceedings are completed efficiently
This is not wrong – but it is also not maximally outcome‑oriented.
A litigation funder works differently and can act as a process risk negotiation lever. It earns only if the result is good. Consequently, the focus shifts:
Not “How do I end the case?” but “How do I increase the achievable settlement value?”
Rule 1: The Framework Sets the Range
Negotiations do not begin with arguments, but with perception.
The first number defines the scope within which everything else moves.
Whoever starts cautiously implicitly accepts a low upper bound. Whoever starts ambitiously forces the opposing side to defend its own lower limit.
This is less strategy than psychological mechanics: the first anchor shapes the entire expectation.
Rule 2: Pressure Comes from Consequences, Not Arguments
Companies rarely respond to legal conviction, but to economic risks.
The value of a claim therefore arises from real consequences:
- ongoing acceptance default
- uncertainty about workforce planning
- internal provisions and budget effects
The clearer these factors become, the higher the settlement pressure.
Without translating these factors into economic reality, even a strong case remains theoretical – and theoretical cases are rarely valued highly, which often leads to a severance too low outcome.
Rule 3: Early Settlement Is Rarely Optimal
The settlement hearing often creates the impression that a quick solution makes sense.
In fact, the pressure at this point is usually still low:
- little cost incurred
- risk not yet concretely experienced
- organizational consequences barely noticeable
Early settlements are often stable, but rarely maximal.
The economic value of a case typically rises noticeably only after the consequences have begun to affect the opposing side’s daily operations.
Rule 4: Time Does Not Change the Case – But the Perception of Risk
Most people treat time in the process as a neutral factor.
That is a mistake.
Time only has an effect when it creates structural consequences.
A proceeding that drags on for months leads not only to delay, but to:
- ongoing costs due to acceptance default
- growing uncertainty in workforce planning
- increasing internal justification pressure
A one‑time decision becomes an ongoing problem.
And exactly that changes the negotiation logic.
Unstructured delay is stagnation. Structured duration changes value.
Rule 5: Good Negotiators Think in Scenarios, Not Norms
Many lawyers focus on the question of how a court might decide.
Better strategies arise from a different perspective:
Which development leads to the economically best outcome?
Law is merely the framework here. What matters is the dynamics within that framework.
Rule 6: Reactive Negotiations Lose Control
Many proceedings follow a simple pattern:
Offer from the opposing side, reaction, new offer.
That is not a strategic process, but a reaction chain.
Active negotiation means, on the contrary:
Set the tempo, control expectations, and deliberately structure decision pressure.
Control does not come from legal strength alone, but from the ability to shape the course of the proceedings.
Conclusion: Outcomes Stem from Structure, Not Chance
The amount of a severance is rarely solely a question of law.
It is the result of:
- framing
- real economic pressure
- temporal structure
- active negotiation
The difference between an average and a very good settlement rarely lies in the law.
But rather in whether someone merely handles the case – or actually steers it, especially when aiming to avoid a severance too low outcome.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.