The Bottom Line on Out of Court Settlements
- Dan T. Matrafajlo
- Mon Feb 2017
- Car Accidents,Personal Injury,
Your attorney is strongly encouraging you to take an out of court settlement. You are wary of the idea. Obviously, the other party was at fault. Your injuries are quite severe. You well deserve your day in court. Why should you even consider settling your case?
First, you should know that more cases are settled than those that go to trial. According to one resource, only four to five percent of all of the nation’s personal injury cases actually wind up in court. The reasons might make sense to you.
The Path to Out of Court Settlements
In many personal injury matters, the statute of limitations does not start to run until two years from the date of the accident. (Notice we said many and not all. You should always meet with an experienced personal injury attorney soon after your accident to make sure your claim is filed within the time guidelines required by New Jersey law.)
If time allows it, your lawyer may actually hold off on filing the summons and complaint, the legal document initiating your lawsuit. Since you are not paying any fees or expenses up front, you may not recognize the advantage. There are fees associated with filing these documents and will ultimately be deducted from any settlement or court award.
Evaluation of Your Personal Injury Case
When a law firm takes on your personal injury case, the first step is an evaluation of two major factors. Liability and damages are integral components of every personal injury claim. Liability means that someone did something by an act or omission to cause you harm. For example, that driver that raced through the red light and hit you as a pedestrian will likely be assigned at least some liability for your accident.
You cannot have a personal injury case without damages. This is an overall term that relates to your injuries and treatment for them. If you escaped a serious accident without damages, you cannot make a claim for them.
As a matter of course, your lawyer will begin an investigation of your claim and also contact the defendant’s insurance company. Both sides are eager to negotiate a settlement of the claim. Generally, this will start when you have been released from medical treatment. If your condition is chronic, a treating doctor may indicate that you have received maximum medical benefit.
During this process, your attorney will obtain and submit records regarding your medical treatment. Medical bills are also transmitted, as well as documentation of their payment. All of this paperwork is submitted in the hopes that the insurance company will make a settlement offer.
Why the Insurance Company Wants to Settle
Don’t be under the impression that insurance companies want to settle every car accident case or premises liability claim. It’s simply not true. However, settlement offers are generally offered for the following reasons:
- Liability against the insured is clear
- Cost of paying legal fees makes settlement less expensive
- Charges associated with expert witnesses and testimony
- Move claims faster
- Fear that the court could award more money than the offer
Your attorney is obligated to pass on all settlement offers to you. Notwithstanding, an experienced personal injury lawyer will be able to provide counsel concerning the offer. This will be based on the liability issues, as well as how badly you were injured.
Out of Court Settlements Can Happen Up to Trial
At some point, the lawyer you retained may find it necessary to file the documents necessary to start the lawsuit. It may be because of concerns regarding the statute of limitations. It could also mean that the insurance company is not interested in negotiating your accident claim.
Further legal documents are involved once the case is entered with the court. These include completion of written questions, also known as interrogatories. You may also be requested to give oral testimony at a deposition. Once the lawsuit has been filed, the insurance company will generally hold off on making a settlement offer until your deposition has concluded.
Keep in mind that the request for settlement does not necessarily just come from the insurance company. Your attorney may make a settlement demand on your behalf.
Settlement discussions can continue even when your case is called to trial. Juries who have started consideration of cases are often confused when their services are no longer needed mid-trial. This usually means that the parties have come to an agreement.
Why Consider an Out of Court Settlement?
Our list regarding the reasons insurance companies want to settle may further confuse you as to the reasons you might be encouraged to settle. However, here are some things you should consider:
- Liability may be questionable
- Jury could find no cause for your case
- Court could assess a portion of liability to you
- Case will finish quicker
- Counsel may need to obtain expert witness and testimony
In personal injury cases, attorneys a percentage of the amount that they obtain for their clients. They receive no compensation unless they achieve recovery. Claimants should be aware that expenses paid in pursuit of the case are not part of attorney fees. The cost of court costs, medical bill records invoices, and expert witness reports could severely impact the bottom line of a personal injury award.