Understanding Personal Injury Settlements: What to Expect

Personal injury verdicts often capture headlines with staggering figures, sometimes in the tens or hundreds of millions of dollars. However, settlements, which resolve the vast majority of personal injury cases, receive far less attention. This is partly because many settlements are confidential due to nondisclosure agreements, and partly because they typically involve smaller sums than high-profile jury verdicts.

Settlements: The Most Common Outcomes in Personal Injury Claims

Similar to the high rate of plea bargains in criminal cases, civil cases also predominantly end in settlements. Estimates suggest that around 95% of civil cases are resolved through settlements at various stages, from pre-filing to post-verdict. This means that understanding the settlement process is crucial, especially if you or a loved one is considering a personal injury claim or evaluating a settlement offer.

How Do Personal Injury Settlements Work?

A settlement in a personal injury case is an agreement where the plaintiff (the injured party) accepts a specified sum in exchange for not pursuing the case further in court. This negotiation can be complex. The plaintiff risks accepting less than they might receive from a verdict, while the defendant (the party being sued) offers a settlement to avoid the costs and uncertainties of a trial. The appeal of a guaranteed settlement often outweighs the potential but uncertain higher verdict.

Personal Injury Lawsuit Outcomes

According to the U.S. Department of Justice, only 4% to 5% of personal injury cases go to trial. A 2005 study by the Bureau of Justice Statistics found that plaintiffs win about 50% of personal injury trials, with the highest success rate in auto accident cases (61%) and the lowest in medical malpractice trials (19%). Accepting a settlement guarantees compensation, whereas rejecting it involves a significant risk of receiving nothing.

Typical Compensation in Personal Injury Cases

Compensation in personal injury cases varies greatly based on the specifics of each case. However, some general trends from the 2005 study provide insight:

• Half of all plaintiffs received $24,000 or less.
• The median award was $31,000.
• The median award in auto accident cases was $16,000.
• Premises liability cases had a median award of $90,000.
• Medical malpractice cases had an average award of $679,000.
• Product liability cases had a median payout of $748,000.

Factors Influencing Settlement Outcomes

Several factors affect the decision to settle or go to trial in personal injury cases, including:

• The severity of the injuries
• The impact on the plaintiff’s daily life and work
• The cost and duration of treatment and recovery
• Emotional and psychological damages
• Certainty of liability
• Cost of litigation
• Potential length of litigation
• Additional costs such as reputational damage

Some states have caps on damages, which can limit the amount a jury can award, particularly for non-economic damages like pain and suffering. These caps can significantly influence settlement negotiations.

The Role of Lawyers in Personal Injury Settlements

Advocating for Your Rights

Having an attorney is crucial during settlement negotiations. Experienced personal injury attorneys can provide invaluable insights and represent your interests against the insurance companies’ legal teams. They help assess the value of your case and navigate the complexities of the settlement process.

Negotiating Settlement Offers

Attorneys bring expertise in calculating damages, including lost wages and long-term impacts. They also understand state-specific nuances, such as insurance company obligations to settle within policy limits. Their relationships with insurance companies, built through repeated interactions, can facilitate more favorable settlements.

Filing or Threatening a Lawsuit

If settlement negotiations fail, the plaintiff’s primary recourse is to file a lawsuit. This threat can be more potent with an experienced attorney, as lawsuits are costly and time-consuming for insurance companies.

Timeline of Personal Injury Claims and Settlements

Personal injury claims must be filed within state-specific statutes of limitations, typically ranging from one to six years. Prompt action is essential to preserve evidence and witness testimony. On average, settlements are reached within 11.2 months, though this can vary widely.

How and When Are Personal Injury Settlements Paid?

Once a settlement is reached, the payment process generally takes a few months. If an attorney is involved, the settlement is sent to their office, and they deduct their fees before disbursing the remainder to the plaintiff. Many personal injury attorneys work on a contingency basis, meaning they only get paid if you do.