Statistically, most cases settle voluntarily, and without having to go to trial. Trials take time, are expensive and take a lot of work. They can also produce unexpected outcomes. From a professional standpoint, an experienced personal injury lawyer may want to take a case to trial — but the decision to go to trial is always left to the client. The job of an experienced personal injury lawyer is to help clients achieve the best result in their case. I find that most of the time, the client wants the matter resolved quickly and fairly, so settlement is usually preferred. However, if a fair settlement cannot be reached the matter must be resolved by trial.
Most experienced personal injury lawyers understand that a settlement should not be rushed, particularly if one desires a good settlement. Settling a case is often a process. Good settlements usually take time and effort. The process can be complex and take many months or even years. Different lawyers initiate the process in different ways (who goes first and so forth), but it always ends up with an offer and a series of counteroffers and counter-demands. However, the numbers passed back and forth are based somewhat on reason given the facts of the case. A good lawyer will prepare the case for trial in an effort to get the best settlement possible. The settlement offers and counteroffers will be based on the evidence that each side expects to present and hear at trial. A party that has prepared a strong case for trial may be in a better negotiating position when it comes time to settle the case.
Deciding whether to accept a settlement offer requires you to consider subjective as well as objective factors. For example, there are benefits to ending your claim sooner rather than later. Litigating the case can take a high toll emotionally. On the other hand, the time, anxiety, energy and risk assumption required to go to trial may be worth it for the client —because of the potential for greater compensation. Client objectives vary, and each case and each client is different. The settlement process offers an opportunity for dialogue — and out of this dialogue comes a decision that fits the client in that case.
There are numerous factors to think about when considering a settlement offer, but issues to consider start with the amount of money being offered, the conditions attached to the offer and the amounts owed to third parties — like health care providers, other insurance companies and lienholders. There are laws and contractual obligations that govern these third parties’ rights to participate in the distribution of settlement proceeds. These rules are part of every settlement agreement, and you are expected to know them. An insurance company has no duty to explain the rules to you. Third parties such as health care providers might also claim part of your settlement behind the scenes.
A settlement offer is always measured against this one question: “What will a jury do in your case?” No one knows for sure of course. But the reasonableness of a settlement offer is whether a jury may award an amount close to the offer or some amount that is much higher or lower. If your lawyer believes it may be difficult to get a jury to award much higher than the offer, then the settlement offer should usually be accepted.
There is also a difference in the settlement value of a case versus the actual value a jury may decide. The settlement value of a case is always less than the actual value of a case. This is because the settlement value takes into account the enormous expense and risk of going to trial. The settlement value is always a judgment made by the parties. The settlement offer has to be high enough to persuade the claimant to accept the offer to avoid the increased risk and expense of going forward with litigation and a trial. For example, if there is a strong defense concerning liability (i.e., the defense can show that a jury might not find the defendant at fault for the accident or find that the plaintiff shares a good portion of the fault), then the settlement value of case will be reduced even further to reflect the risk that no fault or little fault may be assessed against the defendant. Insurance companies will always evaluate settlement value lower than what a jury verdict might be. Again, the insurance carrier knows that the plaintiff will incur risk and expense by going to trial so the offer will reflect these uncertainties.
Other considerations involve what debts, claims or other liens might exist against your settlement recovery. Your lawyer’s job is to get a settlement offer that will take care of any and all deductions that must come out of your recovery. If the settlement offer is not sufficient to pay all of these debts, you may be liable for the rest. Sometimes, your lawyer can help by negotiating or using other remedies available under the law to make sure all of your obligations are covered. Depending on the circumstances, your lawyer might be able to convince creditors to take a lesser amount in exchange for immediate payment. But because this is an uncertain process, it is important to discuss your debts and obligations with your lawyer when analyzing a settlement offer.
on Feb 2nd, 2010 at 11:41 pm
Another great article Chris! Keep them coming.
Dave