A large majority of personal injury claims settle prior to litigation. The insurance companies usually prefer to settle prior to litigation. The injured person also wants to get paid as soon as possible. Also, most insurance adjusters and experienced plaintiff’s personal injury lawyers have a general idea what a case is worth. Why should everyone expend the resources when everyone has a general idea of the final settlement?
Lawsuit settlement before filing
When a RI Auto Accident lawsuit is filed, the insurance company has to retain an attorney to represent their insured. The Insurance companies typically use a personal Injury defense law firm. When defense counsel receives the lawsuit filing they see a carrot in front of them and the carrot is “billable hours.” The defense law Firm figures that the insurance company was unable to settle the case so now it is time to litigate. Why should the defense firm try to settle the case when they can get paid thousands of dollars and the insurance company was unable to settle the case?
Notable settlement news
- “The California Republican Party has agreed to an $11 million dollar settlement with a Riverside County motorcyclist who suffered life-altering injuries in an Orange County freeway crash that a lawsuit says was caused by an unlicensed campaign worker employed by a then-state assemblyman. The agreement tentatively ends a civil lawsuit filed in Orange County Superior Court on behalf of Richard Ruehle, who was left a quadriplegic by the traffic collision on Aug. 5, 2016, on the eastbound 91 Freeway near the Orange County-Riverside County border.” East Bay Times
- “The truck was driven by a man authorities said was driving drunk. While Nicholas J. Hanley continues to face criminal charges, Hanley, two businesses he co-owns and their insurers have agreed to pay a $5.25 million settlement to Amy Sylve and her husband’s estate to settle a civil lawsuit filed about nine months after the Oct. 14, 2018, crash. Kevin Sylve died at the scene of the crash, and Amy Sylve, who was severely injured, is still in some ways recovering two years later. A head injury she sustained has left her with neurological damage, and though she will continue to improve for a time, her brain will never function the way it once did.” Madison
Litigation is filed
After litigation is filed, the case may not settle until defense counsel makes their money. Defense counsel will answer the case and schedule depositions. Defense counsel will send interrogatories for the Plaintiff to answer. They will send request for production of documents. The defense firms have high overhead and need to make money. Why settle the case quickly if the insurance company could not settle it? The case may still settle later but not until the personal injury defense lawyers make their money. After all, the defense firm can settle the case years later right before trial.
If the Plaintiff requests $10,000 and the insurance company offers $6,000, the insurance company would be better off coming up to $8,000 and ending the case rather than pay at least 3,000 of attorney fees and later pay the plaintiff $6,000. The injured party has a vested interest in settling the matter prior to litigation. Litigation may mean a 2-3 year delay in receiving money. The Plaintiff may need the money. Often the plaintiff would rather take less and be guaranteed to get the money quickly.
Settlement before litigation
The Plaintiff attorney has a vested interest in resolving the case prior to litigation. The amount of work that a plaintiff’s attorney must do in litigation takes away resources from other clients. Often, the amount of additional money obtained in litigation does not justify the additional work In the above example, if the insurance company refuses to come up on its $6,000 offer and the plaintiff refuses to go lower then 10k and after 3 years, right before trial, the case settles for 8k it can be argued that everyone lost. The insurance company lost because it paid out 8k and 4 k to defense counsel for a total of 12k when it could have settled at 8. The Plaintiff lost because he had to wait three years to get his money and has additional out of pocket expenses. The Plaintiff’s attorney lost because he made an additional $666 dollars (1/3 of the additional $2000) but did a lot of extra work. The extra work took valuable resources away from other clients.
