Lawsuit Settlement Process for Auto Accidents

whiplash-settlement-calculatorOverall, almost 95 percent of all personal injury cases never see the inside of a courtroom. Of the remaining 5 percent of cases that go to trial, many will settle before a jury verdict is rendered. These statistics indicate that when a client decides to file a lawsuit, their chances of going to trial are slim. If you’re wondering why, we’re here to answer that question. Partly, it is due to the cost of going to trial. Between filing fees, expert witnesses and transcription costs, it all adds up. This cost comes out of the final amount that a client receives, so it is vital to understand the differences between going to trial and settling.

However, sometimes the insurance company refuses to pay just damages. When this happens, going to court will help the client receive the compensation the client needs and deserves. There is a necessary balance to the law settlement process from deciding when to hold settlement talks to what amount of monetary compensation is acceptable. Having a personal injury lawyer who is able to negotiate successfully influences the outcome.


What Is a Settlement?

A settlement involves an offer by the defendant or insurer and acceptance by the injured party or plaintiff. The offer may be made early before a trial date is set. Insurers often offer low-ball settlements initially to eliminate additional costly entanglements. As the trial date approaches and even after the case is heard in civil court, the amount of the compensation may be increased or lowered, depending on what is revealed about the accident and the defendant’s negligence.

In some cases, the defendant may begin to see that it is more of a financial risk to proceed to trial. Alternatively, the plaintiff may realize that his or her case is stronger or weaker than initially perceived, and make a decision to settle based on that. In some cases, the evidence may show that both the defendant and the plaintiff are responsible for the accident. This alters the amount of compensation under California’s comparative liability law.

Once a Settlement Offer Is Accepted, the Case is Closed

In all cases, once the settlement offer is accepted, there is no longer room to negotiate. Also, if the plaintiff later learns that they will require additional medical treatment for injuries incurred in the accident, they will not be able to ask for further compensation from the defendant. Once the case is successfully settled, it is closed to further developments. That is why an experienced personal injury lawyer will not be too quick to advise a client to accept a settlement amount and will wait until maximal treatment has been achieved. This means that further treatment will not improve the client’s situation.

When Is a Settlement Most Likely?

There are times throughout a case when the prospects of reaching a settlement are high. These are:

  • At the start: This happens when the insurance company wants to settle and eliminate any future problems. Usually, the settlement is much lower than what the plaintiff needs to pay medical costs, cover lost wages, or be compensated for the pain and suffering he or she experiences. While it is tempting to accept such an offer, it may not be the right choice.
  • Prior to setting a date for trial: At this point, depositions have been taken, and evidence in the case is on the table. If the plaintiff’s case is strong, the defendant may decide that there is more to lose by taking the case to court. Alternatively, if the plaintiff sees that going to trial might deny them the amount of damages they deserve, they may want to accept a settlement. For both sides, this is a tedious balancing act since neither side knows for sure how much a jury may award.
  • After a jury is selected: One of the first indicators of a lawyer’s prowess in court is his or her demeanor while choosing a jury. This may influence the defendant’s decision to offer a settlement acceptable to both sides.
  • During the trial: After the trial has started, the true impact the case is making on the jury will become more apparent. Depending on which side is most influential, it might behoove the other to accept or offer a settlement. However, the way the jury understands the evidence might be mistaken, so it is a good thing to think carefully about accepting a lesser offer at this juncture.

Does Your Choice of Legal Representation Affect a Settlement?

Yes, in many cases, it does. This is the way it works: If the attorney is well-known for settling cases rather than taking them to court, the opposition will be under less pressure to reach a fair settlement amount. However, if the attorney is known as an advocate who would just as easily take the case to court than settle, the pressure to reach a decent settlement is increased. You can take a look at your lawyer’s history of settling and the amount that was accepted to get a good idea of his or her strengths.

Why Insurance Companies Settle

These are common reasons why insurance companies settle:

  • Control their risks: One of the biggest risks a defendant/insurer has is that the case will be presented to a sympathetic jury that will decide to award the plaintiff a considerable amount. By settling, the defendant will be able to exert control over the payout.
  • Publicity: Many times, a defendant does not want the publicity that a jury trial can bring. This can be avoided by settlement. An example would be when a defective product is involved. The company’s reputation can be tarnished if someone was injured or killed when using their product. To avoid the news coverage often initiated by a defective product trial, the company may move to make a considerable settlement. Some settlement agreements incorporate confidentiality, so others will not be told of the settlement amount.
  • Time and money: By settling, the defendant can avoid the expense and time of a jury trial.

Why Plaintiffs Settle

Plaintiffs may decide to settle for several reasons:

  • The time it takes to be compensated: Many plaintiffs avoid going through a protracted trial simply because they need to collect monetary damages sooner rather than later. With medical bills mounting and the austerity that lost wages bring, it becomes difficult to wait. Insurers often bank on the plaintiff’s need to pay bills and feed their family while they are laid up.
  • The effort of a trial: Trials are not just time-consuming, but in some cases, involve a consistent effort by the plaintiff. Since many injured parties are still recovering from the accident, this becomes a strain on their decreased endurance. This is of particular concern to those who are trying to present the case themselves.
  • Risk of losing: The old adage of having something in hand is better than the promise of something is of particular note when deciding on taking a case to trial. A plaintiff may be made to believe that a low-ball settlement is better than nothing at all. The problem with this thought process is that plaintiffs can severely hurt themselves by doing this. After all, the accident was not their fault, yet they are suffering because of it. By accepting a low settlement offer, the plaintiff may also be faced with having to pay for damages themselves due to an accident they were not responsible for. A seasoned personal injury attorney weighs the strengths of a case carefully before taking it to trial.

How the Worth of a Case Affects Settlement

The bigger the case, the more significant the risk is that a jury will award a substantial amount. This can affect the defendant’s willingness to settle for an acceptable amount. Juries often award considerable amounts to a plaintiff for pain and suffering as well as punitive damages in an egregious case.

How Punitive Damages Can Affect a Case

Punitive damages often are substantial and this places the defendant at particular risk. Such damages are awarded to punish the defendant. They are not meant to compensate the plaintiff for a loss. Although they are frequently considerable, this can be a dual-edged sword for the plaintiff. A plaintiff is not required to pay taxes on compensatory damages that compensate them for a loss. However, since punitive damages are not compensatory, the plaintiff will be asked to pay taxes on punitive damages. Also, if the judgment is considerable, the defendant may decide to appeal the decision, tying the case up in court.