Most personal injury cases are settled before trial. Some are settled before a lawsuit is filed, while some are settled during the litigation process. As a case unfolds, issues of liability and damages and possible defenses to a personal injury claim unfold. Parties, their attorneys, judges, and insurance claims adjustors all work toward resolution. There are several settlement opportunities during the course of a personal injury claim.
Settlement Before Litigation Begins
Litigation is expensive. It costs over $10,000 in attorney fees and costs for the average vehicular accident case to be resolved after litigation begins and before trial. When liability and damages issues are clear and uncontested, it is often in everyone’s best interests to get these cases resolved before a lawsuit must be filed. Statutes of limitation vary from jurisdiction to jurisdiction, but in general, a negligence claim often has a one year period from the date of injury to the expiration of the statute of limitations. If you have not filed a lawsuit before the limitation period has expired, you will be precluded from pursuing your personal injury claim.
Therefore, the first real opportunity to resolve a claim is before the expiration of the limitation period. Insurance claims adjusters have a fair amount of incentive to resolve a case before they have to involve an insurance defense attorney and begin incurring legal fees and costs. If you have an attorney, make sure that you lay out the issues of liability and damages as clearly and completely as possible. If your recovery from your injuries is complete you will have a clear understanding of the total amount of your medical bills at this point. That can make settlement easier. If you have not completely recovered from you injuries or if your injuries are more severe, it may be difficult to get a complete picture of your medical damages at this early stage. You may be able to estimate your medical damages, but estimate carefully. Once you have accepted a settlement, you cannot go back and undo it later if you find that your medical bills exceed your estimate.
State Your Case Clearly and Concisely
Your attorney will draft a settlement demand outlining the issues of liability and damages and attaching copies of all relevant documents. These documents can include copies of a police report for a vehicular accident, pictures of the accident location or of property damages. Pictures of your injuries can also be helpful for the insurance adjuster to understand the pain and suffering component of your damages. In addition, your attorney can add medical bills and copies of x-ray and MRI reports and other medical records related to your injuries. But be careful that you do not include medical records that are unrelated to the injuries or that reference other medical issues that you may have. Your attorney can also include copies paystubs if they show a decrease in your wages and can support a lost wages claim.
Make the argument for your settlement demand amount clearly. You want to make sure that your demand letter and all documents support your personal injury claim. Your demand is a starting point for negotiations to begin.
Making an effective settlement demand is an art. You don’t want the demanded amount to be too low, because an insurance adjustor will usually counter at a lower amount than your demand. However, if your demand is outrageously high, an insurance adjuster is likely to forego settlement altogether or give you a counter offer that is outrageously low. Neither is a helpful move to resolve a case at this stage. Instead, make sure that the settlement demand is realistic and supported by the evidence.
Settlement After Filing a Lawsuit
It is possible to settle a claim before trial even if you have already filed a lawsuit. Filing a lawsuit protects your right to recovery and begins a new process with the court system. The filing of a lawsuit triggers the calendaring of a trial date on the court’s calendar. It also provides another period of time to resolve a case before additional money is spent on discovery and trial costs. Many people settle cases at this time through mediation and arbitration. Mediation is more informal than is arbitration, but both allow a neutral third party the ability to move a case toward resolution.