A settlement is an agreement made between a plaintiff and a defendant outside of the courtroom. In a settlement, the insurance company usually agrees to pay you a larger sum of money for your claim than they originally offered. Many plaintiffs prefer settlements rather than going to court because a trial involves the risk that the plaintiff gets nothing.
After an accident, you’ll need to obtain compensation for your damages, or may be expected to pay for someone else’s. Knowing what to expect from a settlement can help you decide if you want to take one or go to court. Whatever you choose, an experienced lawyer can be there to guide you.
When do settlements happen in the lawsuit process?
Settlements can happen at any point in the lawsuit process before the judge has ruled on your case. This includes:
- Before any lawsuit has even been filed, during initial negotiations with the insurance company.
- During the lawsuit but before the trial has started. This is probably the most common time that settlements are reached.
- During the trial itself. There is no rule prohibiting settlements once the trial has started. If one side sees the trial going against them they may suddenly offer to settle. In some cases, settlements are even reached while the jury is deliberating their verdict.
The only true limit is that once the jury has reached a verdict, and the judge rules on the case, it is impossible to settle. At this point the judge’s ruling is an order with the force of law behind it, and making a different agreement is no longer an option.
Why are settlements so common?
- Most defendants are insurance companies. Insurance companies have a budget to pay out claims on accidents; it’s the business they’re in. Settling cases allows them to keep the costs predictable, rather than taking big risks by going to trial. Controlling risk is essential to their business model.
- Settlements are quiet. When a court issues a verdict it’s a matter of public record, and it officially shows that one side wronged the other. Settlements are less public. They can be kept completely private if both parties agree to it, and they don’t make a company look bad the way that a trial verdict does.
- Victims often want to avoid trial. Trial isn’t just costly and unpredictable for the defendant. The victim of the accident or injury may want to keep costs low or simply avoid a long, stressful legal battle. A settlement allows them to get a financial recovery much sooner.
Should I settle my case?
Settlements aren’t always a good thing or a bad thing. Many settlement offers are bogus, and represent the insurance company trying to get rid of your case for cheap. Other settlement offers are very fair and are much safer options than going to trial.
You should have an experienced lawyer who can advise you on whether a given settlement is worth taking or not. They will consider several factors when evaluating a settlement offer:
- How sympathetic would your injury be to a jury? Will a jury side with you?
- Does the insurance company have a strong argument against you—like a pre-existing injury that might explain your current condition?
- What county or jurisdiction will your trial be held in? Does this court have a history of big verdicts for cases like yours, or are they stingy?
- Is the amount of the settlement offer close to what you’re asking? If not, is a trial likely to be more expensive than just taking the lower amount?
- How strong is the evidence in your case? Does it seem likely that reasonable people would agree you are the victim?
Two settlement offers for the same dollar amount might be viewed very differently in two different cases. This is why it’s so important to have a lawyer who has worked on cases like yours before.
Get help for your settlement from an experienced lawyer.
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