The vast majority of personal injury cases are settled before or during trial; only a small percentage of these lawsuits are tried in court and reach a jury verdict. There are many benefits (for both the injured party and the defendant) to keeping a personal injury case out of the courtroom – and out of the hands of a jury. Read on to get a sense of how a personal injury lawyer would negotiate the settlement of a lawsuit.
Once a civil lawsuit has been filed, serious settlement discussions will almost never begin until the defense attorney has done all of the pretrial investigation (“discovery”) that he/she wants to do. This includes discovery tools like interrogatories and depositions. Insurance companies will rarely if ever want to engage in serious settlement negotiations until they have all of the facts that they need to make a decision.
In bigger or more complex cases, defense attorneys are generally not willing to talk seriously about settlement until after the plaintiff’s lawyer has identified the plaintiff’s expert witnesses. This is because they want to wait and see if the plaintiff’s lawyer has in fact done the work that is needed to make the case ready for trial.
In some cases, the defense attorney will file a motion for summary judgment (a motion to dismiss the lawsuit). In those cases, the defendant may not be willing to discuss settlement until after the court rules on the motion. If the court grants the motion, then the case is over; it has been dismissed. But if the court denies the motion, then it’s time to talk. Other times, the defense attorney will be willing to discuss settlement while the court is considering the motion. In settlement negotiations, every case is different.
In discussing settlement, it is the insurance company and the defense attorney who hold all the cards. They are the ones with the money. If they are not ready to talk seriously about settlement, the plaintiff and the plaintiff’s attorney will get nowhere in settlement discussions.
Good plaintiff’s lawyers don’t want to appear overeager to talk settlement because the defense attorney might interpret that as being desperate. If the defense attorney thinks that the plaintiff is desperate to settle, the defense attorney will usually make lowball offers and try to get the plaintiff to settle for far less than the case is worth. Thus, good plaintiff’s lawyers usually wait until the defense attorney asks them to make a settlement demand.
In smaller injury cases, especially when the lawyers know each other, one lawyer will just pick up the phone and talk settlement. The plaintiff’s lawyer may or may not write an actual demand letter. Then, the defense attorney may or may not respond with a counteroffer. If the defense thinks that the demand was too high, he/she may simply ignore the demand or may say that the demand is too high and that the insurer will not make a counteroffer. If the defense does make a counteroffer, then the bargaining begins. Sometimes the lawyers can settle it, sometimes not. If they can’t settle, they will likely go to mediation.
In larger personal injury cases (and sometimes in smaller cases), the lawyers and their clients will usually attend mediation. Most courts nowadays require the parties to attend mediation to try to get the case settled. Mediation can be done with either a private mediator or a judge who is not assigned to that case. The mediator meets with all sides in the beginning, and then meets separately with the plaintiff and the defendant to see if he/she can get the parties’ numbers closer together. Mediation can go on for hours or even days. Mediation does not always work, but it has a very good track record in getting cases settled.
Settlement negotiations can go on for a long time. Do not be discouraged by the fact that negotiations are taking so long, there are many reasons for it. As long as the two lawyers are still talking, settlement negotiations can continue.
If the injured person accepts the defense attorney’s settlement offer (a lawyer cannot accept a settlement offer unless his or her client agrees), then the case is settled. All the lawyer needs to do to let the defense attorney know that the offer has been accepted is to tell him/her, by email, phone, fax, letter, or a combination of the above.
The most important rule about settlements is that, once the plaintiff tells the defense that he or she has accepted the settlement offer, the case is over. In almost every state, this is final. A change of heart about the settlement offer, even five minutes after it’s been accepted, will go nowhere. Just like any other contract, there is almost zero chance of getting the court to reverse a settlement agreement. For this reason, it’s important that the plaintiff carefully consider the terms of a settlement offer – amount of money, payment terms, release of liability, confidentiality terms – before accepting.