Re your case in point 1, it is precisely this thinking that they want to exploit. "They wouldn't be suing us if they didn't have a case, so let's just settle".

Re your case in point 1, it is precisely this thinking that they want to exploit. "They wouldn't be suing us if they didn't have a case, so let's just settle". Except that if it actually comes to court, chances are it'll be thrown out within a minute.