A Practical Look at Settlement Versus Trial After Negotiating a Personal Injury Claim
It's an age old question, with still no clear cut answer.
Should I settle my personal injury claim or go to trial? First, I have to preface this article by saying the obvious.
All personal injury cases are unique.
So, this is not intended to be strict rules of engagement.
Additionally, it is a fact that most personal injury cases get settled before jury verdict.
However, with that being said, there are numerous factors that an attorney and the client look at in deciding when to settle and when to push a case toward trial.
Let's explore some examples of the dilemma.
I think it would be helpful to look at 2 different case scenarios in order to help understand the issues.
The first we will call, the lay down liability case.
This is the situation where the negligent party is 100% at fault.
In Michigan the rules are different depending upon whether it is an auto crash or premises liability claim.
But for our purposes, we will assume that the defendant is liable and is going to pay some damages.
In this 100% liability situation, the issue is how much compensation is the injury worth.
After all, it is the insurance companies wants to pay as little as possible on the claim.
So, let's say the insurance company makes an offer of $50,000.
00 and no more to settle the 100% liability case.
No lawsuit has been filed.
Your attorney has determined that there is a wide range of value on the case, and it should be worth between $60,000-$100,000.
00.
So, what does the client do, take the money or fight? The first thing you do is present the offer to the client.
They will undoubtedly ask your advice.
What should I do? I would tell them that they have minimum expenses at this point.
If they accept the offer, the money is available immediately.
There is no risk of getting less at trial.
The money is tax free and it ends their stress about the lawsuit.
If they file suit, the initial expenses will be the filing fees and service of process.
The insurance company will hire an attorney and they will have have 21 days to answer the complaint.
Then, the process of discovery starts.
Discovery consists of answering interrogatories and depositions.
The client will ultimately have to pay for experts and doctors depositions out of the settlement proceeds.
They will be required to make court appearances.
The attorney's for each side will prepare briefs and go to mediation.
The case itself could take another year or two to resolve.
However, there is always the chance that filing the suit alone could produce an offer of 10% or 20% higher right off the bat.
However, you cannot count on that.
In this case, I would not try to steer the client in either direction.
I would tell them $50,000.
00 is close enough if they want to end it now, they should take the offer.
But, I would not encourage acceptance of the offer.
The second scenario is the case where the defendant is claiming that they are not at fault or that your client contributed to their own injury.
In this case, the insurance company may be a little more stubborn about settlement.
Now, the attorney needs to analyze how much validity should be given to the claim of the defendant that your client was partly at fault.
If your attorney believes that their defendant is just blowing smoke and has no credibility, then the value of the case should analyzed in the same fashion as the first case.
However, if the attorney believes that there is a possibility that the defendant is not responsible, then you must analyze the probability of a lessor verdict or a no cause.
A no cause constitutes a complete loss.
If the client's injuries are very serious, it may be necessary to file a complaint because the offer is not high enough.
For instance, let's say the attorney believes his client's damages are $500,000.
00 and the insurance company is only offering $50,000.
00.
Then the client is in tough spot and likely will not accept the offer.
The client will likely do better by pushing the case toward trial.
In this case the attorney may be looking for a compromise settlement of $250,000.
00 as a reasonable resolution because of the potential for a defendant's verdict of nothing.
Finally, there are some cases where the insurance company is unwilling to pay the reasonable value of a claim prior to litigation.
This could be due to several factors, such as, the adjuster is over worked or unreasonable.
In some cases, the insurance company simply has a policy to not ever offer a reasonable settlement until forced into litigation.
The bottom line is that the decision to settle or file a lawsuit depends upon many factors.
Some of these factors are personal to the client.
The important thing is that the client is fairly compensated for their injuries.
Should I settle my personal injury claim or go to trial? First, I have to preface this article by saying the obvious.
All personal injury cases are unique.
So, this is not intended to be strict rules of engagement.
Additionally, it is a fact that most personal injury cases get settled before jury verdict.
However, with that being said, there are numerous factors that an attorney and the client look at in deciding when to settle and when to push a case toward trial.
Let's explore some examples of the dilemma.
I think it would be helpful to look at 2 different case scenarios in order to help understand the issues.
The first we will call, the lay down liability case.
This is the situation where the negligent party is 100% at fault.
In Michigan the rules are different depending upon whether it is an auto crash or premises liability claim.
But for our purposes, we will assume that the defendant is liable and is going to pay some damages.
In this 100% liability situation, the issue is how much compensation is the injury worth.
After all, it is the insurance companies wants to pay as little as possible on the claim.
So, let's say the insurance company makes an offer of $50,000.
00 and no more to settle the 100% liability case.
No lawsuit has been filed.
Your attorney has determined that there is a wide range of value on the case, and it should be worth between $60,000-$100,000.
00.
So, what does the client do, take the money or fight? The first thing you do is present the offer to the client.
They will undoubtedly ask your advice.
What should I do? I would tell them that they have minimum expenses at this point.
If they accept the offer, the money is available immediately.
There is no risk of getting less at trial.
The money is tax free and it ends their stress about the lawsuit.
If they file suit, the initial expenses will be the filing fees and service of process.
The insurance company will hire an attorney and they will have have 21 days to answer the complaint.
Then, the process of discovery starts.
Discovery consists of answering interrogatories and depositions.
The client will ultimately have to pay for experts and doctors depositions out of the settlement proceeds.
They will be required to make court appearances.
The attorney's for each side will prepare briefs and go to mediation.
The case itself could take another year or two to resolve.
However, there is always the chance that filing the suit alone could produce an offer of 10% or 20% higher right off the bat.
However, you cannot count on that.
In this case, I would not try to steer the client in either direction.
I would tell them $50,000.
00 is close enough if they want to end it now, they should take the offer.
But, I would not encourage acceptance of the offer.
The second scenario is the case where the defendant is claiming that they are not at fault or that your client contributed to their own injury.
In this case, the insurance company may be a little more stubborn about settlement.
Now, the attorney needs to analyze how much validity should be given to the claim of the defendant that your client was partly at fault.
If your attorney believes that their defendant is just blowing smoke and has no credibility, then the value of the case should analyzed in the same fashion as the first case.
However, if the attorney believes that there is a possibility that the defendant is not responsible, then you must analyze the probability of a lessor verdict or a no cause.
A no cause constitutes a complete loss.
If the client's injuries are very serious, it may be necessary to file a complaint because the offer is not high enough.
For instance, let's say the attorney believes his client's damages are $500,000.
00 and the insurance company is only offering $50,000.
00.
Then the client is in tough spot and likely will not accept the offer.
The client will likely do better by pushing the case toward trial.
In this case the attorney may be looking for a compromise settlement of $250,000.
00 as a reasonable resolution because of the potential for a defendant's verdict of nothing.
Finally, there are some cases where the insurance company is unwilling to pay the reasonable value of a claim prior to litigation.
This could be due to several factors, such as, the adjuster is over worked or unreasonable.
In some cases, the insurance company simply has a policy to not ever offer a reasonable settlement until forced into litigation.
The bottom line is that the decision to settle or file a lawsuit depends upon many factors.
Some of these factors are personal to the client.
The important thing is that the client is fairly compensated for their injuries.
