This question will plague most personal injury plaintiffs at some point during their lawsuit: Should you settle and take less than what you think your case is worth, or risk it all at trial?
Most plaintiffs will choose to settle — and for good reason. Jury verdicts are, at best, hard to predict.
Settlement — “A Bird in the Hand”
The downside of settlement is obvious to most plaintiffs — you get less money than you would get from your best possible trial outcome. From a defendant’s standpoint, though, this makes perfect sense. Why would a defendant settle with you for the most you could get at trial? That makes about as much sense as you agreeing to settle for $0.00 when there is a chance you could win at trial.
The upsides to settlement are numerous:
You get paid a lot sooner than if you have to wait for a trial date.
You no longer have to stress about your lawsuit.
The defendant can’t appeal a settlement. The defendant can appeal a judgment — which could easily tie up your money.
The benefits boil down to a guarantee of payment in the near future and a lifting of stress. Of course, this depends upon receiving a reasonable settlement, given your damages and chances of winning at trial. This begs the question of what your lawsuit is worth, which is the subject of another article.
Trial — The Grass is Always Greener?
Many plaintiffs who settle their cases later experience buyer’s remorse about having had “their day in court.” Of course, this hindsight is viewed through rose-colored glasses. They quickly forget the stress that the uncertainty of their lawsuit injected into their life. They become much more optimistic about what their chances are at trial. The risk of recovering nothing from their lawsuit is ignored now that the risk has been removed.
On the positive side, winning big at trial can be euphoric. You feel vindicated and relieved and act like you “knew you would win all along.” Holding an arrogant insurance company or major corporation accountable that refused to make you a decent settlement offer feels great. This brings me to the ultimate point of my article — trial should be reserved for when the defendant is unreasonable.
When You Should Choose Trial Over Settlement
Some cases just can’t be settled. Most often, these will be cases that involve one of two issues. The first issue is liability. Liability refers to whether the defendant was negligent or committed another tortious act. In normal, non-lawyer English, the defendant did something wrong that was either negligent or intentionally reckless. If the defendant argues that he or she is not liable, the defense can win outright at trial without paying you anything. Some cases, like a slip and fall injury, can be hard to prove.
The second issue is causation. Did the defendant’s conduct, even if negligent, legally cause the injuries claimed? This issue arises in most cases. The most common is where the plaintiff had a pre-existing condition or the plaintiff was involved in multiple prior accidents.
Cases involving liability or causation issues are particularly difficult to settle when the damages are large. If you have $1,000,000.00 in damages, but the defendant can pay you nothing at trial, reaching a reasonable settlement figure may be impossible. From your standpoint, you can’t afford a low settlement offer due to medical bills, lost wages, and the chance of being fully compensated with a win at trial. From the defendant’s standpoint, why pay a large settlement when they may not have to pay anything at trial? When the stakes are particularly high, even when the damages (should you win) are not hotly contested, a win-it-all or lose-it-all case may be impossible to settle.
Risk of Paying Defendant’s Trial Costs
On the verge of trial, most insurance companies file an “Offer to Confess Judgment.” This is usually “risk-free” on behalf of the defendant and allows them to offset part of the verdict if the dollar amount is the same or less than the offer.
When should you settle a personal injury case?
In cases where liability and causation are not at issue (there are cases where defendants will admit these things before trial) and the only issue is the amount of your damages, the possibility for a fair settlement is much greater. When the defendant knows that he or she will have to pay something at trial, and the only issue is how much, the case should settle. These cases should not be tried unless the defendant’s insurance company is completely unreasonable in evaluating your damages. The defense will likely file an “offer to confess” to hedge their bets on what dollar amount the jury will award. The good news is that should your defendant be unreasonable, you can go to trial knowing that you should win something, and you are only gambling on the winning amount.
Be Reasonable
Thankfully, most parties to lawsuits will act reasonably (at some point) when evaluating their odds of success at trial and the dollar amounts at issue. This is why the majority of civil cases are settled. As long as you are reasonable, you should have no regrets about your decision, whether to settle or go to trial.