STEP 6 - NEGOTIATING WITH THE DEFENDANT
A settlement offer can be made after a lawyer investigates the claim, evaluates the expenses suffered by the plaintiff and collects documentation to support these matters. A settlement is extremely useful because it can prevent the need to take a claim to trial or even to ever file the claim with the court. The basic idea of a settlement is that the defendant “buys” the plaintiff lawsuit, which keeps the matter from ever being brought to trial. Settlement offers always follow the basis premise outlined below.
OPENING OFFER
A fair settlement offer can be made after treatment is completed. After treatment, the party responsible for the injury is notified and information regarding any insurance that may cover the injury is requested. Additionally, the injured party’s correspondence describes what occurred (referencing any supporting documents such as witnesses statements or police reports) and the expenses occurred (damages by the plaintiff). The purpose of this correspondence to the responsible party is to show what the plaintiff’s theory of the case will be. Another reason for this correspondence is to emphasize facts that will resonate with the jury, trying to dissuade the defendant from wanting to take the case to trial. A majority of pre-filling settlement offers are conducted by an insurance adjuster and require medical records, itemized bills or medical summaries from a treating physician to support claimed expenses and treatments.
A limited-time offer to settle the claim is made at the very end of the description of the incident, injuries and expenses. Since the settlement amount should cover all expenses incurred as a result of the defendant’s action and additional expenses for non-economic damages, a great deal of strategy and planning goes into formulating the opening offer amount. Furthermore, determining the opening offer amount includes balancing many factors, such as what could possibly be awarded at trial and the benefit of receiving compensation for the injury immediately (rather than in several months or years). Experienced lawyers prefer having the claim handled by an insurance adjuster because insurance adjusters are not paid based on the number of hours they put into a claim. Therefore, insurance adjusters may be more willing to settle a claim early since they are not getting any added monetary benefit if the settlement gets settled at a later date. If the defendant accepts the settlement offer, the money is paid to the plaintiff in return for no claim. However, if the defendant refuses the settlement offer, the claim is ready to enter the courts.
PRE-FILING NEGOTIATIONS
Once the opening settlement offer is made, the two parties may continue to negotiate towards a settlement offer. Nevertheless, the plaintiff must keep in mind the applicable statute of limitations during the negotiations. Furthermore, it is imperative that the plaintiff places definite time-limitations upon all the offers since there is no turning back once an offer is accepted. This idea is explored in Lewis v. Gilbert, where the plaintiff made an oral settlement offer that the defendant accepted before the plaintiff filed suit. The intention of the plaintiff was to state that the offer expired upon the date the case was filed, rather than at the time of the day the case was actually filed. Nonetheless, the court was unconvinced and enforced the oral settlement offer that the defendant accepted. Thus, the court made it clear that an oral settlement offer may be made instead of a written settlement offer and a date of determination must be made plainly, including the time of withdrawal, when proposing the offer.
Even if a settlement offer is not reached between the opposing parties, a settlement offer can be helpful because the offer informs the two parties of what the other thinks of the claim. Experienced lawyers are able to establish how much an opposing lawyer values the claim based on the settlement offer. This information gained by the experienced lawyers can be used in mediation, post-filing offers and determining whether the other side is likely to prefer a settlement over a trial.
It is not unusual for opposing parties in a personal injury claim not to come to a settlement before filing with the court. Additionally, just because a case is filed does not mean the two parties will not come to a settlement. Yet, the claim must be filed before the statute of limitations runs.