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The strict legal rights of the parties to a lawsuit. The word merits refers to the substance of a legal dispute and not the technicalities that can affect a lawsuit. A judgment on the merits is the final resolution of a particular dispute. the actual and intrinsic rights and wrongs of an issue as distinct from extraneous matters and technicalities.
Dignity is honorableness, a quality of the person being elevated. Respect is a viewpoint, a quality of the person doing the elevating. In your example context, there is considerable overlap of connotation, and one could be used in place of the other.