A personal injury claim may be settled out of court or may proceed to trial. Most personal injury claims begin as settlement negotiations. If an agreement cannot be reached through negotiations, then a claim may move on to a trial.
The amount and type of compensation an injured person can receive varies on a case-by-case basis. It is also affected by whether the claim is settled out of court or goes to trial.
What is a Settlement?
A settlement is an agreement arrived at without going to court or without concluding a trial. Several parties may be involved in the negotiations, including:
- you, as the claimant,
- your attorney,
- an insurance claims adjuster who works for the insurance company of the defendant,
- and maybe an attorney representing the defendant and/or the insurance company.
The settlement value of a personal injury claim is the compensation a claimant receives through settlement negotiations. It’s usually an average that the claims adjuster arrives at by investigating similar claims. Insurance policy limits may also influence the amount of a settlement offered.
Damages paid in a settlement are generally lower than the amount of compensation you can receive through a successful personal injury lawsuit. On the flip side though, going to trial takes more time and costs more too.
As long as the settlement offered is fair and covers most or all of the claimant’s injury-related expenses and other damages, many decide to settle out of court.
Keep in mind, it is the claims adjusters’ job to satisfy claimants while also keeping costs low. This means the adjuster will try to get you to agree to an amount that is lower than your claim may actually be worth.
For example, a lot of auto insurance policies only offer between $15,000 and $30,000 worth of liability coverage. This means a settlement offer may be significantly lower, like somewhere around $5,000, dependent upon circumstances of the accident and the injuries and damages you suffered.
The trial value in a personal injury lawsuit is generally higher than the compensation claimants receive through settlements. It is a judge or jury that awards compensation in a trial. Their decision is based on evidence, not on averages generated by a computer program.
Some settlement negotiations stall out. Others end when the compensation offered is:
- Otherwise low
Particularly in cases where the defendant’s actions were willfully negligent or otherwise egregious, damages awarded in a trial can be significantly higher than the settlement offered.
If you and your attorney file a lawsuit for a car accident, where the other driver was willfully negligent, then the trial damages may be double or triple the settlement offer by the insurance company.
How Settlement and Trial Values are Connected
Your attorney can advise you about settlement offers and can negotiate the matter for you with the claims adjuster to get the best settlement offer possible. If the offer is unfair or unjust, an attorney can also take your claim to court.
If a lawsuit is filed, some insurance companies will re-evaluate their settlement offers. In other words, they may offer a higher settlement, closer to what you and your attorney consider reasonable. The insurance company may do this just to avoid the time, expense, and publicity of a trial.
If a fair agreement is arrived at after a lawsuit is filed, this is also known as a settlement. In this case, the settlement value may be equal to or at least closer to the trial value for your damages.