Car Accident Settlement vs Litigation

January 2, 2020

This is Part 4 of the “Everything You Should Know / Do Following a Car Accident” series. Check out the links at the bottom of this article to jump ahead or back in the series. In part 4 of this series we will discuss what considerations will be made when deciding whether to settle or litigate your case. 

You are the injured party in a car accident. You have an attorney and a good case. Now you and your attorney need to decide whether you will litigate the case or settle. Let us take a look at how this process should play out to help you make the best decision.

Negotiations

On day 30 or day 60, depending on the type of demand sent (we reviewed this in part 3 of this series Medical Care and Gathering Evidence), the insurance company will make its first offer. It is rare for an insurance company to make an offer before required to do so under the applicable statute. At HPS Law, we inform our clients of initial offers the day they are received.

Most first offers are low; this is normal. We typically recommend making a counteroffer to the insurance company. When we make a counteroffer, the insurance company usually replies within one to two weeks.

After negotiating for several weeks, the insurance company will present its final settlement offer. At this point, we put together a settlement statement. The settlement statement itemizes fees, expenses, medical bills, and calculates the net amount of money a client would receive in pocket if the offer is accepted.

Settle or Litigate

We have negotiated the best possible settlement offer form the insurance company, and you know what you would net if you accept. Now it is time to make a very important decision. There are only two options: settle your case or reject the offer and file a lawsuit. At HPS Law, we share our professional opinion regarding what we believe you should do with your case; but the decision is ultimately yours.

Factors we consider when advising our clients on settlement vs. litigation

  • Will litigating your case will likely produce a better net result for you?
  • Is there a risk that we lose at trial if liability is disputed?
  • What is the venue or County where the case must be filed?
  • The amount of insurance available to pay a potential verdict.
  • Is there an argument that the insurance company was acting in bad faith?
  • Will our client present well to a jury?
  • Will the defendant (at fault driver) present well to a jury?
  • Will the defense attorney learn damaging information about our client’s case during discovery?

Factors you should consider when deciding on settlement vs. litigation

  • Do you have the patience required for litigation? Litigated cases rarely settle quickly. Some litigated cases go all the way to trial. It is not uncommon to wait a year or more for a trial.
  • How much risk are you willing to take? An ethical attorney cannot promise any outcome if your case is tried before a jury. We can provide jury verdict research and let you know what we think a jury may award, but unlike a settlement, there is no guaranteed money.
  • Have you been completely honest with your lawyer? When a lawsuit is filed, the opposing lawyer will have subpoena power to gather much more information than the insurance company could gather prior to litigation. If you have not disclosed prior injuries to your lawyer, your lawyer cannot accurately value your case.

If you have reached the decision to settle, most cases are closed within 30 days of accepting the offer. Also, HPS Law lawyers structure settlements so that clients do not have to pay taxes on their settlement money.

Conversely, if you decide to reject the offer, the litigation process will begin. The ‘Litigation Process’ is the next part of our series.

If you want to know more, check out the rest of our series below. Of course, you can always reach us by calling us directly at 404-400-1175 .

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