A frequently asked question I get is “Should I settle my personal injury cases or should I file a lawsuit?” Well, it depends. In a nutshell, if one has a very small case, settlement before filing a lawsuit should be the goal. If someone has a significant case, a lawsuit should be filed.
Big Case v. Small Case
What’s a big case and what’s a small case? This is a loaded question. There are so many types of injuries. For purposes of this article, an example of a small case would be someone who is rear ended while sitting at a red light. He suffers from whiplash and misses a few days of work. His primary care doctor prescribes physical therapy and pain medication for a month or two. After that, he feels fine. The goal of a case like this one is settlement without filing a lawsuit. Of course, this assumes that the responsible insurance company is willing to settle for a fair amount of money. With many insurance companies nowadays, don’t hold your breath. A lawsuit might be necessary even on a “small” case.
An example of a big case would be someone who requires surgery for his injuries and/or extensive medical care. His activities of daily living are affected for a long period of time and sometimes permanently. In cases involving significant injuries or death, usually it is wise to file a lawsuit. That does not necessarily mean the case will be tried. In fact, it probably will not. However, most “big” personal injury cases require a lawsuit.
On serious personal injury cases, the insurance companies want to “see a show” before they are willing to settle.
Before insurance companies are willing to part with substantial sums of money, they usually want you to jump through some hoops first. “How many hoops?” you ask. Sometimes not many and sometimes WAY too many. They just seem to want to make plaintiffs and plaintiffs’ attorneys work extra hard for a substantial settlement. In my twenty years of practice, I can count my substantial settlements before filing a lawsuit on one hand.
To illustrate my point, I had a case not long ago that was a case of clear medical malpractice. A radiologist misread a chest x-ray of a young man and identified a cancerous legion as “just a spot, nothing to worry about.” A couple of years later, that young man started coughing up blood. That spot was now diagnosed as late stage lung cancer which carried with it a very low rate of survivability. If he was diagnosed a couple of years earlier, he would have been treated and according to science, would have lived a long healthy life. Instead, as a result of this radiologist’s error in reading a chest x-ray, his situation was grim.
The case seemed like clear malpractice to me. I sent the medical records to some experts who all said they had never seen a case of such blatant malpractice. One told me that in the 40 years of doing medical/legal work he had never seen a case as indefensible as this one. I tried to have discussions with the hospital’s lawyers but they were not interested in settlement discussions. So, I filed a lawsuit.
The hospital’s lawyers took more than thirty depositions, family members, treating doctors, our experts, most of who were out of state… After about two years of litigation and thousands of hours and dollars spent, and as trial approached, I got a call from the hospital’s lawyers. They wanted to discuss settlement. Soon thereafter, the case settled for $4 million dollars. I probably would have settled it for less if the hospital’s lawyers were willing to discuss resolution when I first approached them a couple years prior.
The only thing that all this time, money and effort showed was that the hospital’s radiologist blew it. I knew that before any substantial work was done. My experts knew it too. I’m pretty sure the hospital, the negligent radiologist and all of his experts knew it as well.
The only logical reason I could see for all the work performed was that the hospital didn’t want to write a fat check until we gave them a show. I’ve seen this many times in my career on significant cases. In fact, it seems to be the rule rather than the exception.
Will filing a lawsuit increase the value of a personal injury case?
Filing a lawsuit does not increase the value of a personal injury case per se. However, my strong belief is that aggressively pushing a case towards trial does increase the amount an insurance company is willing to pay to settle a case. That’s part of the reason why I recommend filing lawsuits on more substantial cases, i.e., you can’t push a case towards trial until a lawsuit is filed.
To illustrate, when I was very early in my law career, I represented a man who got salmonella poisoning at a luncheon he attended. In addition to the usual vomiting and diarrhea that he got for a couple of days, this man suffered from a reactive arthritis in one of his thumbs. Essentially, one of his thumbs was rendered dysfunctional as a result of the type of salmonella poisoning he got.
Before filing a lawsuit, I demanded $150,000 and the insurance company offered $7,500. My firm had “round tabled” the case and evaluated at about $75,000. Given the gap between my demand and the offer made from the insurance company, negotiations would have been pointless. I filed a lawsuit. We litigated the case and when it was ready, we were assigned a trial date. Fast forward about a year or so and the day of trial was now here.
I’m driving to trial and rehearsing my opening statement in my head. My cell phone rang. It was the insurance adjuster. He said, “How much is it going to take to make this case go away?” I replied “I’m at $150,000 and you are at $7,500. I think we’re going to have to let a jury decide.” I wasn’t posturing. I wasn’t playing it cool or trying to negotiate. I was shooting straight. I really didn’t think that settlement was realistic. He said, “Will your client take $140,000?” I replied, “Let me check with my client.” When I called my client to obtain his authority to settle, I think he may have dropped the phone out of excitement. The case settled “on the Courtroom steps” as they say. I learned early on that there’s nothing like the threat of a trial to get an insurance company to write a check.
Learning that insurance companies tend to pay more as that trial date approaches was an extremely valuable lesson I learned very early in my career. Not every case that I file gets to the actual day of trial but it just seems that the threat, the real threat, of trial, is what gets insurance companies to pay full and fair value of a particular case.
You can still settle after filing a lawsuit.
Filing a lawsuit does not mean you give up your ability to settle your case. A case can settle the day a lawsuit is filed, it could settle during trial and anytime in-between. If you would like to discuss whether you should be attempting to settle your case or whether you should sue in Court, feel free to contact us at 312-957-4166. The consultation is free and we might be able to provide some advice on whether your case should be settled without a lawsuit or if a lawsuit is necessary to obtain the compensation you deserve.