Should You Take an Out of Court Settlement of Your Personal Injury or Car Accident Claim?

 

Money is Often the Most Important Factor When Deciding Whether to Accept a Personal Injury Settlement Offer. But There Are Other Things to Consider When Choosing Whether to Settle Out of Court or Go to Trial.

 

The goal of a personal injury settlement is to get as much money as possible for the injuries you suffered because of someone else’s negligence. But that doesn’t mean money is the only thing you should consider when deciding whether to settle your car accident or products liability case out of court, or go to trial before a jury.

 

The purpose of this article is to discuss the advantages and disadvantages of settlement versus trial in your injury case. These are intangible factors to consider during litigation, meaning it’s difficult to put a monetary value on them. And every accident victim will weigh the factors differently.

 

Keep reading to learn more. And before making a final decision on whether to accept the insurance company’s settlement offer or go to trial, call me for a free consultation: 804-251-1620 or 757-810-5614. As an experienced Richmond car accident lawyer and Virginia injury attorney, I’ll help you calculate how much your personal injury case is worth, decide when the best time to settle is, and explain additional factors you should consider before giving up your right to a jury trial.

 

What is an Out of Court Settlement?

 

Before we look at the advantages and disadvantages of settling out of court versus going to trial, we need to know what an out of court settlement is.

 

An out of court settlement is often referred to as a compromise agreement or release of claims. One court has defined it as:

 

A compromise agreement is an agreement to settle a previously existing claim with a substituted performance. A valid compromise and settlement bars all right of recovery on the previously existing claim. This is because the compromise agreement is substituted for the claim, and the rights and liabilities of the parties are measured and limited by the terms of agreement. The previously existing claim is extinguished by the compromise and settlement and, as a result, any subsequent litigation is barred. A compromise agreement is a contract and, as such, there must be mutual assent of the parties and consideration.

 

Put simply, an out of court settlement in a personal injury case happens when you – the accident victim – sign a contract agreeing to accept a lump sum amount of money in exchange for releasing the defendants – whether it is the insured driver, business, manufacturer, or insurance company – from liability for your injuries under tort law. If you accept an out of court settlement then file a lawsuit against the defendants, the defendants may have the lawsuit dismissed based on the settlement.

 

Usually an out of court settlement results after the parties have exchanged information and documents and negotiated.

 

Though most civil cases settle out of court, there is no requirement that the parties try to negotiate a settlement. Sometimes it makes more sense to file a lawsuit and go to trial.

 

Why Settle? The Advantages of Settling Your Personal Injury Case Out of Court.

 

In most personal injury cases the parties disagree on the amount of damages the accident victim deserves. This is normal.

 

But even if you think the medical records, expert witness testimony, and witnesses support your case, there is no guarantee that you will win before a judge or jury.

 

Here are some of the benefits to settlement of your personal injury or car accident case:

 

You Will Receive Compensation Quicker Through Settlement Than You Would Through Trial

 

The trial process is slow.

 

Depending on what court has jurisdiction over your case, your trial may not start for more than one year after the date you file suit. Generally federal courts schedule trial quicker than state courts, at least in the Federal Court for the Eastern District of Virginia, also called the “Rocket Docket.”

 

Even if you win at trial, it may take another year or more to get compensation if the defendants appeal the trial court’s decision.

 

As you can see, the length of time adds up. It is not uncommon for the entire trial and appeals process to take more than three years, even in a seemingly straightforward auto accident case.

 

This is a long time to wait. And an advantage of settlement is that you reduce the time it takes to get compensation.

 

Accepting a Settlement Allows Both Parties to Reduce Attorney Fees

 

Most personal injury attorneys, myself included, represent accident victims and injured workers on a contingency fee arrangement. This means we receive a percentage of any pre-trial settlement or trial verdict . But if the case is dismissed on summary judgment, or if the jury finds for the defendant, there is no attorney’s fee.

 

The amount of the contingency fee often varies depending on when the case settles. The most common fee arrangement is that the attorney receives 33% of any settlement before trial and 40% of any settlement amount after trial starts.

 

An advantage of settling before trial, therefore, is that you will pay a lower attorney’s fee and net more money.

 

The defendant can also save on attorney fees by settling before trial, even though the attorney fee arrangement is different on the defense side.

 

In personal injury cases the defendant usually pays its attorney by the hour. The longer the litigation and trial process lasts, the more money the defendant will have to pay in attorney fees. By settling early in the case and potentially avoiding discovery such as depositions, the defendant can reduce its legal costs and save money.

 

Accepting a Settlement Reduces Out-of-Pocket Costs and Expenses

 

Paying your attorney is not the only expense of bringing a personal injury lawsuit. You must also pay for medical records, expert witnesses, deposition transcripts, and court reporter fees.

 

Litigation expenses escalate quickly as you get closer to trial. By settling out of court you can save money on litigation costs so that you pocket more money.

 

For example, many expert witnesses charge several thousand dollars per day for in-court testimony. If you reach a settlement before trial you do not have to pay for their time.

 

Trials are Stressful and Time Consuming

 

Litigation and trial are stressful and time consuming.

 

Hearings, depositions, facing cross-examination from defense counsel, answering written discovery like interrogatories, meeting with your attorney, and attending trial all take a lot of time and energy. They can cause you frustration, disrupt your relationships with friends and family members, and have a negative impact on your ability to work.

 

When you settle you can avoid many of these legal and court proceedings.

 

Settlements Are Private, Trials Are Not

 

Most settlements are confidential. In fact, many businesses and insurance carriers will require it as a term of settlement.

 

Trial, on the other hand, is a matter of public record. Unless the judge seals trial proceedings, everything that happens during litigation and trial can be read or attended by the public.

 

If you are a private person you may prefer settlement to trial.

 

Privacy, however, can also be a disadvantage of settlement. Some of you, especially those of you injured by a defective product or mistreated by a person or individual, may want to publicize the outcome as a public service.

 

Settlements Are Predictable, Trials Are Not

 

Anything can happen at trial.

 

The judge may make an error and exclude important evidence.

 

The jury may allow less in damages than you ask for.

 

Witnesses you thought were strong may struggle on the witness stand.

 

All of these factors create uncertainty at trial. When you settle you eliminate this uncertainty.

 

Settlement Guarantees That You Can Collect the Judgment

 

If you are awarded damages at trial, the defendant has several options to try to avoid paying the amount awarded. These options not only include appeals, but also declaring bankruptcy. And if the defendant declares bankruptcy you may get just a fraction of the jury award.

 

Settlement, on the other hand, guarantees that you will collect damages for your injuries.

 

Settlement Gives You Leverage to Negotiate Liens

 

The total amount of money offered in settlement is not the most important number. The amount of money you will net after paying back liens is.

 

For example, your attorney will need to negotiate medical provider liens. And maybe even a workers comp lien if you suffered a personal injury at work that entitles you to workers compensation benefits such as temporary total disability or permanent partial disability payments. This often happens when an employee is hurt in a motor vehicle accident while working.

 

You can use the out of court settlement offer to negotiate a reduction in liens. And sometimes you can use settlement of the personal injury case to get a top-dollar workers compensation settlement at the same time.

 

Settlement Gives You Finality

 

A win at trial may get overturned on appeal. By settling you eliminate this risk and get finality. The settlement is a contract that the defendant must honor.

 

What are the Disadvantages of Settlement Versus Trial?

 

Settlement is the right decision for many accident victims, but not all.

 

Below are some of the advantages of going to trial instead of accepting an out of court settlement for your personal injury.

 

The Jury May Award More Money at Trial

 

There are countless examples of accident victims who rejected a settlement offer and went to trial, where the jury awarded tens of thousands of dollars more than the last settlement offer.

 

In many cases a jury trial will give you a better chance of receiving full compensation for your injuries.

 

Trial Gives You Your Day in Court

 

Money is important but it’s not the only thing. If you feel that you have been wronged and want to raise public awareness of the accident, trial is the best way to do it.

 

Settlement Can Cause Resentment

 

Accepting a settlement out of court may lead to you wondering “what if” and feeling unsatisfied.

 

Everyone’s personality is different. If you’ll spend a lot of time dwelling on what could have happened at trial, then you may not want to settle.

 

Is an Out-of-Court Settlement Right for You?

 

Sometimes settlement feels like a big win. Other times it can feel like a loss.

 

If you’re not sure whether you should settle or go to trial, call me for a free consultation: 804-251-1620 or 757-810-5614. As your attorney I’ll explain all possible outcomes to you and discuss the factors to consider when deciding whether to settle outside of court or present your case to a jury.

 

Corey Pollard
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