Resolution Before Trial: Settlement
Created by FindLaw's team
of attorney writers and editors.
The majority of legal claims arising from accidents or injuries do not reach a civil court trial. Typically, they are resolved earlier in the litigation process through a negotiated settlement among the parties. Sometimes an informal settlement can take place before any lawsuit is even filed. Through settlement, the plaintiff (the person filing the lawsuit) agrees to give up the right to pursue any further legal action in connection with the accident or injury, in exchange for payment of an agreed-upon sum of money from the defendant or an insurance company. In rare cases, instead of paying money, the defendant will agree to perform or stop performing a certain action.
If you are thinking about settling a legal claim after an accident or injury, or if you have received a settlement offer from the opposing side, you may want to talk to an attorney. It’s important to get his or her thorough assessment of the case and opinion about the likelihood of settlement. When meeting with your attorney you should consider and discuss the following points:
Strength of the Case
- Jury verdicts and settlement outcomes in similar cases;
- Your chances of winning at trial;
- Practical difficulties in trying the case;
- Strengths and weaknesses in your evidence; and
- Strength and weaknesses in your opponent's evidence.
Money and Damages
- What your attorney thinks the case may be worth in a range of dollar amounts and what he or she thinks you could receive in damages at trial;
- The minimum amount you will accept to end the case and avoid trial;
- The policy limits of the defendant's insurance coverage; and
- The defendant's own monetary resources.
Questions for the Plaintiff
- How much of the settlement proceeds will be applied to your lawyer's fee and your expenses. In most personal injury cases, the attorney is paid with contingency fees meaning that you do not have to pay attorney’s fee unless you are successful at trial or there is a settlement in your favor;
- How the settlement payments will affect your federal and state income taxes. Most settlements are considered taxable income that must be reported on your tax returns. The percentage you pay depends on the circumstances of your case;
- Consider what you're willing to give up in order to get the case settled. Usually, there must be some give and take on the part of the plaintiff and defendant to negotiate a settlement that both sides will accept;
- Think about the possibility of a partial settlement. In other words, settle the easy issues first while you continue to negotiate the more difficult ones; and
- Decide whether you are willing to accept a remedy other than money;
- Unfavorable publicity for either side. Generally, civil court trials are open to the public, which allows for media coverage and scrutiny;
- The amount of personal information that could be revealed at trial or through further discovery;
- Possible disclosure of business information or trade secrets;
- When the case is likely to be called for trial and the estimated length of the trial;
- The opposing lawyer's negotiation tactics. Your lawyer may have negotiated with the opposing lawyer before, or has talked to other lawyers to get an idea of what to expect; and
- The extent to which your opponent is likely to play "hardball" and be unwilling to negotiate.
Presented with a Settlement Offer? Consult with A Lawyer
As a party to the lawsuit, only you can make the final decision of whether to accept a settlement. But keep in mind that opposing counsel is obligated to get the best possible deal for their client, which means offering you as little as possible. Is it a good deal for you, too? That can be a complicated question best analyzed by a seasoned attorney. If you need legal advice about a settlement offer, contact a local personal injury attorney today.