Once a lawyer has investigated the claim, assess the expenses incurred by the plaintiff, and gather documentation to support these matters, an accurate settlement offer can be made. A settlement can prevent the need to take a claim to trial, or even to ever file the claim with the court. The basic premise of a settlement is that the defendant “buys” the plaintiff’s lawsuit, thereby preventing the matter from ever being brought. Settlement offers will be a reoccurring part of litigation, but they will allow follow the basic premise outlined below.
Once treatment is completed a fair settlement offer can be made. The responsible party is contacted and information about any insurance that may cover the injury is requested. The correspondence also describes what occurred, referencing any supporting documents such a police reports or witness statements. It also outlines the expenses incurred—damages, in legal terms—by the plaintiff. The point of this description is to show the defendant what the plaintiff’s theory of the case will be. It also highlights facts that will resonate with a jury, making the claim as unappealing to take to trial as possible for the defendant. Most pre-filing settlement offers will be handled by an insurance adjuster, and they will require medical records, itemized bills, or medical summaries from a treating physician to support claimed expenses and treatments.
At the very end of these description of the occurrence, injuries, and expenses, a limited-time offer to settle the claims is made. A lot of strategy and planning goes into determining the amount of the opening offer. The amount should cover all expenses incurred as a result of the defendant’s actions. It also includes additional expenses for non-economic damages such as pain and suffering. The amount is a delicate balance of many factors, including what could potentially be awarded at trial and the benefit of receiving redress for the injury immediately, rather than in several months or years. Experienced counsel will also appreciate the fact that the claim is being handled by an adjuster, rather than another attorney. Adjusters, unlike defense attorneys, are not paid based upon the hours they put into a claim. Thus, adjusters may be more willing to settle a claim early, rather than rack up billable hours before excepting a settlement offer at a later date. If the defendant accepts, money is paid in exchange for the plaintiff abandoning the claim. If the defendant refuses, the matter is ready to enter the courts for resolution.
After this opening offer is made, the two sides may continue to negotiate towards a settlement offer. The plaintiff must keep the applicable statute of limitations in mind during these negotiations. It is also important that a plaintiff place definite time-limitations upon all offers, because once an offer is accepted there is not turning back. In Lewis v. Gilbert, the plaintiff made an oral settlement offer that the defendant accepted just before the plaintiff filed suit. The plaintiff had intended to state the offer expired upon the date the case was filed, not at the time of day the case was actually filed. The court was unpersuaded and enforced the settlement of the claim for the offer amount. Thus, it was made quite clear that a settlement offer may be made orally, rather than in writing, and that a date of termination must be made explicit, down to the time of revocation, when tendering the offer.
Even when these negotiations fail to produce a settlement, they can be helpful in gaining some insight into what the opposing side thinks of the claim. Experienced counsel can determine how the claim is being valued based upon what offers the opposition makes. This information can be used later in mediation or post-filing offers, as well as to determine how likely the other side is to prefer trial over settlement. These insights come from experience in dealing with many cases before.
It is by no means uncommon for a personal injury claim to fail to settle before filing with the court. And simply because a case is filed does not mean that settlement will never occur or the case must proceed to trial. However, the opportunity to file is fleeting. Settlement can continue, but a claim must be filed with the court before the statute of limitations runs.
For more information on the next step of the Personal Injury Trial Process, please see the below link.
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