According to Karl, Billy must pay all the legal fees if he withdraws from the lawsuit. He must also pay the legal fees if he loses. Billy’s only way out of paying would be to win the lawsuit.

So the longer Karl strings him along, the more the fees will mount.

And since Billy doesn’t have a leg to stand on he can either withdraw now, pay a lot of money, and admit he lied. Or he can keep fighting mounting more fees in the slim nope of winning.