Personal Injury Settlement Considerations

         When you have been hurt due to the negligence of another, whether in a car wreck or slip and fall, it’s important to consider the potential that the case may settle at any point before a jury verdict.  Normally, the first step after the injury will be to gather the evidence of the other side’s liability the accident, usually some kind of report, video, or eyewitness statement. Along with the evidence of liability, evidence of the damages shown by medical reports/bills, lost wages, etc. are necessary.  

           Once your attorney has the necessary evidence, he will normally then send it to the other side, along with a demand to settle. In other words, he will offer to settle the case and have the injured person sign a release of the liable party in exchange for a sum of money.  Since most liable parties are insured, the attorney normally seeks satisfaction of damages from the liable party’s insurance company, and the demand will be capped at the limits of the insurance. For example, if the liable party only has minimum SC state vehicle insurance limits of $25,000.00, that’s the amount the attorney will likely demand if the medical bills are beyond five thousand.

         Parties will go back and forth after the initial demand, as the insurance company will likely “lowball” with a counter to the demand much lower than the demand.  Then the lawyer may drop his demand to a lesser amount, and the counter may come up. If parties reach agreement, the case is settled “pre-suit” or before filing.  The positive aspect of settling pre-suit is that at that point the injured party will likely have almost no “costs” involved, that would come out of his part of the settlement (note:  the attorney will normally perform work on contingency, in which the attorney receives 1/3 of the settlement or jury verdict and the injured party receives 2/3 but minus any costs of the litigation and any medical liens to his insurance company).

         An example of a pre-suit settlement:  The injured party incurs $6,000 in medical bills.  The other side has a $25,000.00 policy, of which the demand is the full policy.  The parties go back and forth and finally settle on $18,000.00 paid by the liable party insurance company in exchange for a release of their insured by the injured party.  Because this was pre-suit and involved no costs, the injured party receives their full $12,000.00 with the contingency ($6,000.00 for the attorney). The medical insurance company may have a small lien (potentially $1,000.00) which would come out of the injured party amount, but the rest is with then injured party.

        If the parties are not able to settle pre-suit, the injured party begins to incur costs that will come out of his portion after the attorney contingency.  Filing a lawsuit is normally costs around $150, and all Defendants must be served at roughly $100 each.  During discovery, the injured party would incur the costs of depositions of around $400-500 per deposition.  Experts might be needed, and their fees of thousands of dollars would also factor.  If the case settles during litigation, the injured party might have settled at a higher amount, but then must pay the costs I described.  So “if” the parties settled for $21,000,00, meaning $14,000.00 for the injured party, costs may be beyond $2000.  In that event, the injured party may “take home” less than if settlement was pre-suit. If the case goes to trial, the injured party might obtain a jury verdict of $24,000.00, but the costs might be $4000. In that case, the injured party would be at $14,000.00 (minus any lien), which is $2000 more than if he settled pre-suit.

       The insurance limits will vary, and every situation is different. However, the above factors must be considered in regards to settlement.