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If you've been injured in an accident caused by someone else's negligence, relief becomes your number one concern. You want relief from the pain of your injuries. You want relief from the physical restrictions that are preventing you from living a normal life. Perhaps most of all, you want relief from the constant worry and stress that comes from not knowing what the future will bring. Who will pay the bills that are piling up? How will you make up the time that you've lost at work?
Obviously, the person who caused your injuries is responsible for the damages that you’ve suffered. They need to compensate you for every penny that you’ve lost due to the accident that injured you. In general, you have two ways to obtain this compensation - a settlement agreement negotiated outside of court or a judgment obtained in court.
Filing a lawsuit and going to trial could result in more money than you could obtain through a settlement. However, the vast majority of personal injury cases - well over 90% - settle outside of court. There are a couple of reasons why so many cases settle.
A settlement is a compromise. It occurs when an insurer makes an offer to pay an injured party a specific amount of money in exchange for a release of liability and the injured party accepts. Like all compromises, settlements are offered and accepted as a way to hedge against risk. The risk in all personal injury settlements that is being hedged against is a jury verdict.
Any experienced personal injury attorney will tell you that the most unpredictable element, in any case, is the jury. You can gather the most solid and relevant evidence to support your case. You can present that evidence to the jury in the most effective manner. However, when that jury goes to deliberate, you can never be sure of the result. It is this unpredictability that results in most cases settling before a jury verdict.
That being said, a settlement can happen at any time during the process of pursuing a personal injury claim. It can happen after a claim has been made, but before a lawsuit has been filed. It can happen after a lawsuit has been filed, but before the case has proceeded to trial. It can happen after a case has gone to trial, but before a jury has rendered a verdict. All it takes for a settlement to occur is for one side or the other, or both, to feel that accepting a compromise is preferable to risking an unpredictable outcome at trial.
So, will you have to go to court to receive a settlement for your injuries? The answer to that question depends on many variables. Nevertheless, because the vast majority of cases settle before a jury verdict, the odds are that your case will also settle before a verdict is reached. In fact, it is likely that your case will settle before trial, obviating your need to go to court. Let's take a look at a couple of reasons why this is so.
The vast majority of personal injury cases involve insurance coverage in one form or another. That's because the insurance industry revolves around mitigating loss and our society views loss mitigation as a good thing.
For example, a party understands that an activity involves a certain amount of risk The party understands that if that risk occurs, they will have to pay for any damages associated with the risk out of their own pocket. Therefore, the party insures themselves against the risk and pays an insurance company a monthly premium for the insurance coverage. If that party then causes an accident that injures someone else, the insurer has an obligation to pay the injured party for the damages caused by their insured.
All of this means that insurance companies are essentially risk averse. They don’t want to undertake any activity that will increase the amount of money that they will have to pay on any claim.
A trial is an activity that increases the costs of any claim. First, the insurance company has to pay lawyers to represent their interests. Second, taking a case to trial involves a certain amount of court costs on top of attorney fees. Finally, once the case goes to a jury, there is no guarantee that the jury will find for the insurer. All of these factors tend to make pre-trial settlements much more attractive to insurance companies than protracted litigation.
In some personal injury cases, negative publicity can act as a strong motivation to settle. For example, consider a corporation that has produced an inherently defective product. The defective nature of that product and the people who were injured by that product have the potential to greatly damage the reputation of the corporation and its brand. Therefore, in order to avoid this negative publicity, the corporation will be far more willing to enter into a settlement agreement. Of course, this agreement will not only release the corporation from liability, it will also prevent the injured parties from disclosing the terms of the settlement agreement.
In many cases, an injured party will find themselves in financial distress after an accident. They are unable to work. Therefore, they are earning no money. In addition to normal bills and expenses, they are also now facing the bills and expenses associated with medical and rehabilitative treatments. Often, they are living on their savings. Once that money is depleted, they are in extremely desperate circumstances.
In many jurisdictions, it can take years to get a personal injury case to trial. As we have seen, many injured parties simply cannot wait that long for relief. In addition, as we discussed above, once a case goes to trial there is no guarantee that a jury will find in the injured party's favor no matter how strong the case may be. In such cases, a settlement is the only viable option to alleviate the financial stress. Accepting a reasonable settlement offer expedites the relief the injured party needs and obviates the long wait for a trial and an uncertain verdict.