Personal Injury Settlement Guide: What to Expect
To settle or not to settle?
Most personal injury cases are settled out of court. While a court trial may yield more money, the chance of winning is 50-50. In comparison, a settlement – provided the amount is fair – is a sure thing.
If you’re wondering which route can help you recoup your losses, it pays to know how one or the other can work to your advantage. In this comprehensive guide, you will see how risks, costs, and other factors can be managed if you choose to accept a settlement offer.
How Do You Win a Personal Injury Settlement?
Hire an Experienced, Specialized Attorney
A successful claim starts with seeking representation from a competent attorney. You need someone who can guide you through the intricacies and minutiae of the legal system. Otherwise, you risk getting outmaneuvered by the defendant’s insurer.
It’s also more strategic to look for a lawyer specializing in your case, not just anyone practicing personal injury law in general. Feel free to ask for additional information. If you sustained a significant injury on a commercial property, you could tell an attorney handling credit repair and criminal DUI isn’t the most suitable choice. Now that you know this, you can move on to the next prospect.
At the same time, you raise your chances of winning a settlement if you retain a contingent-fee attorney. The unspoken advantage of hiring one is that they have some skin in the game. They will do all the work and pay all case-related costs and expenses. This gives them a significant financial incentive to win your case because if they lose, they don’t get paid or reimbursed for any of the money they spent on the case.
With an experienced, industry-specific or case-specific attorney handling your claim on contingency, you can move forward with more confidence and ease.
Be Ready With an Amount You Deem Fair
Do the math. You and your attorney can come up with a range of values while you’re preparing the demand letter. Within that range, choose a ballpark figure and commit to keeping it as the minimum amount you’ll accept during negotiations. You don’t have to share this information with the insurance adjuster.
You may use the calculation guide provided below to determine a good starting point. This tool includes a field for entering the value of non-economic damages (pain and suffering). It can be a challenge to measure the loss, but a specialized lawyer can break it down for you.
You can always raise your estimate if you find evidence, later on, that can make your claim stronger or if the insurance adjuster is trying to lowball you.
Do Not Settle for Less
Insurance adjusters may start with a low figure to test your knowledge of your claim’s worth and your patience. Do not give in to the first offer, even if it’s too small but reasonable. Discern whether the adjuster is just baiting you into their tactic. If it’s the former, make a counteroffer that’s higher than their offer but lower than the amount stated in your demand letter.
So if you’re feeling unsure, know that your lawyer will be present in all negotiations and can steer the talks in your favor.
Use Emotional Points to Your Advantage
You should approach settlement negotiations calmly and level-headed. Yet, you can also raise emotional touchpoints to convince the insurance company to settle your personal injury claim. For instance, you can bring out photos of your severely damaged vehicle. Even a simple snapshot of a police stop prior to the accident can remind them about the party at fault.
You can also share with them how your life has dramatically changed (if it indeed has) after the car crash. For example, you were supposed to move to a new state and start your dream job. Or you have a child to take care of, and now he or she is also suffering. Some facts have emotional undercurrents that you can leverage to win a settlement.
Consult your lawyer on how to approach this step.
Confirm Settlement Amount in Writing
When you and the adjuster reach a settlement amount, your attorney will put it into writing by issuing a confirmation letter immediately. This will serve as a record of the terms of your agreement. You should receive a copy of this document before it gets faxed to the insurance company.
How Long Does It Take to Settle a Personal Injury Claim?
The timeline for a personal injury claim varies from case to case. It can range from a couple of weeks to several years or more. If you get an early settlement offer, avoid selling yourself short – be patient.
Unfortunately, insurance adjusters are in the business of loss mitigation. Meaning, their job is to give away as little of their employer’s money as possible. As a result, plaintiffs who receive maximum compensation for their injuries are generally in the fight for a long time.
The typical process looks like this:
The Unfortunate Event Happens
Let’s say you get involved in a car accident with another driver, whom we will call Duke. Witnesses corroborate your version of events and state that they saw Duke drive into your car. You sustained an as-yet-unspecified neck and back injury during the crash.
You Seek Medical Attention
You are taken by ambulance to the nearest health care facility to get diagnosed. An orthopedic doctor says you sustained a lumbar spine injury and a cervical neck injury, including several bulging and herniated discs. Altogether, these will require several months of chiropractic treatment, physical therapy, and pain management through medication.
The doctor also tells you to come back after six months for reassessment. This means another round of diagnostic tests, which may include X-rays, CT scans, and bone scans.
You Decide to Engage a Personal Injury Attorney
Your day-to-day activities become affected because of the pain and limited mobility in your lower back. Because the losses you incurred are due to the accident, which you believe to be Duke’s fault, you consult with a personal injury attorney about your claim.
The lawyer lays down the damages you can seek compensation for, such as your medical bills, lost income, future medical expenses, future loss of wages, and pain and suffering.
You talk to the attorney about fees and agree to proceed to hire him on a contingency basis.
You File a Personal Injury Claim
Your attorney gets down to work and files a personal injury lawsuit, citing that Duke’s negligence caused your injuries. He gathers evidence to strengthen your case, such as the following:
- police reports
- citations issued to the other driver
- witness statements
- video from traffic cameras
- cell phone video from bystanders
- medical records
- medical expert testimonies about your condition and its implications on your work, health, and daily life
Note: In some cases, settlement negotiations start before the lawsuit filing. Thus, there are times a personal injury suit does not materialize.
Settlement Negotiations Start
Your attorney crafts arguments that support your claim that Duke is responsible for the injury you sustained in the car accident. He writes a demand letter to Duke’s insurer, which includes the amount you’re asking as compensation for your losses. This sets in motion the negotiations over your settlement.
Settlement talks do not always start with a demand letter. Your lawyer can start negotiations over phone calls prior to the official document.
Your Case Successfully Settles
Once you reach an offer that satisfies you, the next step is drafting a settlement agreement detailing the damages covered and the compensation amount. The document should also state that you are releasing Duke from all liabilities over the injuries you suffered because of the accident.
You and Duke will sign the settlement agreement, together with your lawyers and his insurer. If there’s an ongoing lawsuit, the agreement will have to be filed with the court and receive approval from the judge hearing the case.
Your Case Does Not Settle
If the settlement negotiations are not going the way you want, you may decide to pursue the lawsuit at this point. If there’s no suit yet, then your attorney can file it on your behalf. The case will go to trial in civil court.
Your Case Goes to Court
Once you file a claim, Duke’s party must respond within a certain period. They may present a counterclaim or a motion to dismiss the case. The discovery process follows right after. This includes exchanging of documents, depositions, and interrogatories.
You can continue settlement negotiations usually through court-mandated conferences. The judge may also order mediation or another alternative dispute resolution or ADR process.
If the chances of winning are low on Duke’s end, the insurer may push for a settlement before the case proceeds to trial.
On the other hand, if the trial goes as scheduled, a jury will hear the evidence and determine Duke’s liability over the car accident and your injuries.
If the jury finds Duke at fault, they will decide on the appropriate amount to award. The judge will deliver the final judgment and award. He can appeal the decision at a higher court.
If the jury finds him not liable for the accident and your injuries, then you get nothing.
The risks involved in a civil trial are high. Thus, it is not surprising to learn that most personal injury claims get settled before the trial. But if you believe you have a rock-solid case, then you’re likely to receive a much higher compensation through a jury award.
What Classifies as Pain and Suffering?
The Cornell Law School Legal Information Institute defines “pain and suffering” as the “physical or emotional distress resulting from an injury.”
While it seems intangible, you can actually prove its existence through medical records or expert testimonies.
Soft tissue or hard injury, permanent or non-permanent scarring, daily life disruptions, emotional distress such as depression, temporary and permanent limitations on activity, and potential shortening of life are some examples of pain and suffering. All of these belong to either two types: physical or mental.
You can claim compensation for these non-economic damages, the value of which is added to your economic damages (medical bills, lost income, loss earning capacity, etc).
How Much Should I Expect from My Personal Injury Claim?
Each case is unique, so it’s not easy to provide an average settlement amount in general.
For the sake of simplicity, we can look at the most common personal injury cases: car accidents, slip and fall, medical malpractice, libel and slander, dog bites, and assault.
Personal injury or tort claims can be further classified according to type. From there, we can make an educated estimate of the value you can expect from your claim.
This type of tort encompasses wrongful acts intentionally done by the defendant. The plaintiff must prove general or specific intent in this regard. Examples of intentional torts are assault, battery, false imprisonment, trespass to land, and intentional infliction of emotional distress.
Battery and false imprisonment caused by the police can be placed within this category.
Personal injury sustained under this category is the result of a breach of duty. Meaning, the liable party failed to perform the standard of care owed to the victim. The act, however, was not intentional.
For example, drivers as reasonable persons have a duty owed to fellow drivers. Thus, they must obey traffic rules and observe proper behavior on the road. Failure to do so can lead to accidents and injuries. The breach of standard of care is called negligence.
Negligence cases make up the majority of torts.
Motor Vehicle Accidents
Average Out-of-Court Settlement: $52,900
Bicycle Accidents, Bus Accidents, Car Accidents, Distracted Driving, Drowsy Driving, Drunk Driving, Motorcycle Accidents, Pedestrian Accidents, Semi-Truck Accidents, Texting and Driving, Train Accidents
Every driver has a responsibility to exercise due care while operating their motor vehicle on the road. This duty includes keeping their car under proper control and avoiding collision with other cars. And it applies not just to fellow drivers but also to bicyclists and pedestrians.
A breach of this duty resulting in harm or injury to another person is the definition of negligence.
The U.S. Department of Justice, Bureau of Statistics says motor vehicle accidents account for 54% of all personal injury cases in the country.
Average Out-of-Court Settlement: $425,000
Likewise, health care providers have a standard duty of care to patients. For example, doctors are expected to treat their patients to the best of their ability. Failure to uphold this standard can be a ground for medical malpractice (med mal) lawsuit.
Med mal trials usually require an expert witness, an individual from the same field with the same skills, training, and knowledge as the defendant.
Average Out-of-Court Settlement: $789,600*
Bathroom Injuries, Commercial Property, Dog Bite, Pitbull Attacks, Nursing Home Abuse, Slip and Fall
A property owner or occupier is expected to perform a standard of reasonable care to the guests on their land or premises. They can be held accountable for harm or injuries sustained on their properties if they knew about a dangerous condition and failed to remove or repair it.
* This figure applies to New York over slip-and-fall claims only. As such, this is also an estimate as most settlements tend to be confidential.
Strict Liability Torts
The application of strict or absolute liability involves actions or products that resulted in people’s injuries. The plaintiff does not need to prove negligence or direct fault in this case. The law assigns strict liability to abnormally dangerous activities.
Defective devices, which fall under products liability, is an area of torts where this is often applied.
Product Liability / Multidistrict Litigation
Average Out-of-Court Settlement: Less than $60,000*
Drugs: Abilify, Gadolinium, Granuflo, Invokana, Pradaxa, Reglan, Risperdal, Testosterone, Xarelto
Medical Devices: Bair Hugger, Essure, Hernia Mesh, Hip Replacements, IVC Filter, Knee Replacements, Transvaginal Mesh
Other Products MDLs: Asbestosis / Mesothelioma, Roundup, Talcum Powder
Product liability allows victims of defective drugs or devices to claim damages from the seller or manufacturer. Many states consider it enough that the dangerous product caused harm for the plaintiff to recover.
* This figure applies to pelvic mesh settlements.
Some personal injury cases can fall in any of the three types, such as the following:
Catastrophic Injuries, Burn Injury, Crush Injury, Paraplegia, Quadriplegia, Spinal Cord Injury, Traumatic Brain Injury, Civil Rights, Clergy Sexual Abuse / Catholic Sex Abuse, Discrimination (Non-Employment-Related), Police Brutality, Police Misconduct, Prison Misconduct. Sexual Abuse, Wrongful Conviction
Soft Tissue Injury
Neck and Back Injuries
Factors that Affect the Value of a Personal Injury Settlement
Not to belabor the point, but different sets of variables play a role in the computation of personal settlements. However, you can have an idea of your anticipated value based on a few common factors among cases.
|Medical Bills: If you sought medical treatment for your pain, enter your cost, including those you didn’t pay out of pocket.||$|
|Property Damage: This usually applies to automotive damage in motor vehicle cases. Leave blank if you have a different injury claim.|
|Lost Wages: This represents the total of lost earnings you incurred when you missed work. Include available time-off benefits.|
|Future Lost Wages: Estimate your lost income if you’re unable to return to work due to ongoing treatment.|
|Estimated Future Medical Expenses: Enter estimated future costs of ongoing treatment and care.|
|Multiplier for General Damages: The multiplier is used to estimate the non-economic damages, also known as compensation for your pain and suffering, you can recover. See below how the multiplier is determined. (Enter a value between 1.5 and 5.)|
Settlement Value Estimate
|Non-Economic Damages (Pain and Suffering)|
|Total Settlement Estimate||$|
Factors That Affect Your Multiplier
The multiplier is used by insurance adjusters to arrive at a fair estimate of your settlement/compensation. While the factor “pain and suffering” sounds subjective, the multiplier helps quantify it using a set of criteria:
- How serious your injuries are;
- How long it will take you to fully recover;
- How your day-to-day life is affected by your injuries; and
- How strong the claim against the alleged party at fault.
Factors like a hard injury, medical treatment expenses, long-term treatment and/or recovery period, and permanent injury can lead to a higher multiplier.
Conditions like a soft tissue injury (bruise, sprain, or strain), medical diagnosis expenses, brief medical treatment, short recovery period, and absence of residual or permanent injury can yield a lower multiplier.