When to Settle a Personal Injury Claim
Only 5% of personal injury claims end up in a court trial. The rest of the time, the plaintiff and the defendant (or their insurance company) reach agreement on a settlement. This is what it means to “settle a personal injury claim.” When someone is hurt due to another person’s negligence—whether it’s an auto accident, slip and fall, or medical malpractice—it is important to hire a lawyer to help navigate the legal process around claims and settlements.
It’s understandable why reaching a settlement is preferable to going to court. The injured party has emergency and medical bills to pay. They might also be unable to work. It may become tempting to take an insurance company’s early offer just to be done with it and move on…but doing that is not always in the victim’s best interest. Attorneys like Hipskind & McAninch can help their clients determine if and when settling personal injury claims is the best strategy.
Personal Injury Claims are Complicated
Experienced personal injury lawyers are there to help build a case and see it through to a fair and reasonable settlement. The process is complex and can take a long time, even if the case never goes to trial.
Some things that might cause delays are:
- Proving liability. Not all cases are clear-cut, with irrefutable proof and numerous witnesses. Gathering the necessary facts to prove fault and that the injuries were caused by the incident can be a big job.
- A large sum is on the line. In most cases, the more substantial the damages, the harder it is to come to an agreement. Defense attorneys and insurance companies will question every aspect of the case. Often their strategy is to stall in hopes the plaintiff will give in and accept a smaller settlement or better yet, drop the claim.
- The injured party hasn’t reached maximum medical improvement. Plaintiffs should wait until they complete all necessary medical treatments. Until the full nature and extent of injuries are known, the amount of a compensation request could be well below the actual costs.
These delays can be frustrating. The plaintiffs need patience throughout the process. If they have a valid case, a personal injury attorney will be able to get them a settlement that fits their needs.
Pros and Cons of Personal Injury Settlements
When a plaintiff’s attorney can successfully reach a settlement with a defendant or their insurance company, there are some advantages.
- The amount of the settlement is known. During a trial, the judge or jury will decide the damages. Yes, it could be substantially higher than the amount of the settlement. But it can also be much lower, or worse, the case could be dismissed for lack of evidence. Either way, going to trial is a gamble.
- There is a quicker resolution. Yes, settlement negotiations can drag on for a long time. But trials take even longer. Car accident trials could take 20 months; medical malpractice, 30 months. And that is usually after negotiations have been exhausted.
- Settlements have faster payouts. After a settlement, a plaintiff can receive a check within 30 days. After a trial, they may have to wait until the case goes through the appeals process.
- Legal fees are lower. A settlement typically costs less in attorney costs than a trial.
- A trial is stressful. Reaching a settlement before a case gets to that point is far less nerve-wracking.
Building Your Case
Even though the typical outcome is a settlement, attorneys prepare as if they will go to trial. The goal is to build a solid case that is compelling enough to convince the defendant or insurance company that the claim is fair. Insurance companies will rarely agree to the amount no matter what. Their goal is to pay nothing, if possible, so they will always try to negotiate the dollar amount down.
It is the plaintiff’s attorney’s job to prove the liability of the defendant, and that the incident in question was truly the cause of the victim’s injuries and losses. To do this they will gather incident reports, eyewitnesses, pictures and videos, and expert witness opinions.
They will also calculate a dollar amount that compensates for the damages suffered. This will include bills for medical care (both immediately after the accident and ongoing) and the cost of property damaged or destroyed. It may also include compensation for lost wages, lost future opportunities, and pain and suffering. Punitive damages, meant to punish the defendant for their negligence, could also be added to the amount.
Navigating Settlement Negotiations
Part of a lawyer’s job is to help their clients understand and navigate the negotiation process. They will put together a settlement demand packet to deliver to the defendant’s attorney or insurance company. It will include the amount of damages they are requesting.
In addition to determining the amount of the request, the attorney will work with the plaintiff on deciding on a lower “drop-dead” settlement amount. This is the absolute lowest amount that they would consider accepting. This amount is, of course, kept private and not shared with the opposing attorney. It is important to know what the number is before beginning negotiations to keep any counteroffers in perspective.
The defense attorney will undoubtedly make a counteroffer, and most likely it will be very low. They may give the impression that this will be their final offer—a “take it or leave it” ultimatum. Their hope is that an uncertain, impatient plaintiff will jump at whatever offer is made. It is important to remember that this is just the beginning of negotiations. A seasoned attorney will be prepared to handle these situations.
In light of the first counteroffer, the plaintiff can adjust the amount of the request. The number should always be adjusted down from the original ask, not up from the counteroffer. Remember, the first counteroffer is usually purposely low. They don’t expect it to be their final offer. For example, let’s say the original request was for $100,000 and a counteroffer of $50,000 was made. Follow up with a request for $90,000, not $60,000.
Knowing precisely when to settle a personal injury claim is different in every case. Eventually, both parties should be able to come to an agreement about what is a fair and equitable settlement. Ideally, it will compensate the victim for all expenses and trouble caused by the incident. At the very least, it should match the “drop-dead” amount that was determined before negotiations started.
If an agreement can’t be reached, the plaintiff can proceed with a trial. It may take longer, but with a valid case and a good personal injury lawyer, the victim could actually be awarded a sum that is substantially larger than the proposed settlement. In some cases, it is the only way to get justice once and for all.