Out-of-Court Settlement or Trial: Which Is Best for My Personal Injury Case?

The vast majority of personal injury cases are settled out of court. Nevertheless, the old adage is that a good lawyer isn’t afraid to go to trial. This is because there are times when settling a case isn’t in your best interest.

Let’s take a look at the pros and cons of both settlements and trials.

What is a settlement?

The term “settlement” refers to the formal resolution of a lawsuit before the matter can be decided by a judge or jury.

A settlement can be reached at any point during litigation. In rare cases, settlements are reached before a lawsuit is formally filed.

Though all cases are different, settling a personal injury case generally looks a little something like this:

1. The plaintiff’s attorney submits a demand letter, which includes the amount of damages the plaintiff is demanding, a legal argument in support of the plaintiff’s demand, and copies of any supporting exhibits (medical bills, police reports, etc.). 
2. The defendant’s attorney submits a response to the demand package (usually in the form of a counteroffer).
3. The attorneys begin to negotiate a settlement. This process usually involves telephone calls and emails between the lawyers, some initial discovery, and motions and pre-trial hearings to resolve minor issues and begin to shape the scope of the trial.

Often, but not always, the parties agree on terms that fall somewhere between the plaintiff’s initial demand and the defendant’s initial counteroffer. When an agreement is reached, the parties sign a formal settlement document, which includes a release (i.e., a statement that the plaintiff can’t later sue the defendant for damages arising from the same claim).

What is a trial?

In a personal injury trial, the parties present their arguments to a judge or jury, and the judge or jury determines whether the defendant should be held liable for the damages alleged by the plaintiff.

A jury trial involves 6 phases:

• Choosing a jury
• Opening statements
• Witness testimony and cross-examination
• Closing arguments
• Jury instruction
• Jury deliberation and verdict

Civil trials can last anywhere from a few hours to a few weeks. However, even short trials involve an incredible amount of preparation. Most of this preparation is done by the attorneys, but the parties have to prepare as well.

Pros of settling a lawsuit (cons of going to trial)

There are several potential benefits to settling a personal injury lawsuit and avoiding trial. For example:

• With a settlement, both parties know the terms before signing the agreement. As such, the parties avoid the unpredictability of a trial.
• Settlements allow the parties to resolve the matter and get on with their lives much more quickly than a trial.
• With a settlement, a check is generally issued to the plaintiff and the settlement isn’t valid until the check clears. On the other hand, a trial results in a judgment and there’s no guarantee that the defendant will have any money at that point or that the defendant will turn over the money without a fight.
• Attorneys’ fees are significantly reduced if a trial is avoided.
• Settlements are often less stressful than trials.
• Settlement terms are typically kept confidential, whereas the results of a trial are generally made public.

Pros of going to trial (cons of settling a lawsuit)

There are several potential advantages to going to trial (and not settling). For example:

• A jury of your peers could potentially award more damages than you’ll receive in a settlement.
• With a settlement, the defendant generally doesn’t admit any wrongdoing. On the other hand, a trial court will determine (and publicly state) if and how the defendant did anything wrong.
• Trials can be cathartic for plaintiffs who want to be heard.

Evaluating a settlement offer

First and foremost, you must evaluate the settlement amount in relation to your damages. Damages in personal injury cases are typically categorized into economic and non-economic damages. Understanding both types is essential to assess whether the settlement offer adequately compensates you for your losses.

Economic damages

Economic damages are quantifiable financial losses directly resulting from the injury. These include:

• Medical expenses: Consider both current and anticipated future medical costs. This includes hospital bills, medication costs, therapy sessions, and any ongoing treatment costs.
• Lost wages: This refers to income you’ve lost due to your inability to work.
• Future earning capacity: If your injury affects your ability to work in the future, this should be included in your calculation of damages.
• Rehabilitation costs: Any expenses related to physical or occupational therapy should be included.
• Home and vehicle modifications: If your injury required modifications to your living space or vehicle for accessibility, these costs are also relevant.

When thinking about economic damages, it’s absolutely critical to consider future economic damages. These include long-term medical care, potential future surgeries, and ongoing therapy. A comprehensive evaluation is necessary because once you accept a settlement, you waive your right to seek additional compensation later, even if your condition worsens or new expenses arise.

Non-economic damages

Non-economic damages are more subjective than economic damages and related to the non-financial impact of your injury. These include:

• Pain and suffering: This refers to the physical discomfort and emotional distress caused by your injuries.
• Emotional distress: Separate from pain and suffering, this covers anxiety, depression, and other psychological impacts of your injury.
• Loss of enjoyment of life: If your injury prevents you from engaging in hobbies or activities you once enjoyed, this loss should be considered.
• Loss of consortium: In cases where an injury affects a relationship with a spouse or partner, compensation for this loss may be included.

What to look for in an attorney

When starting a lawsuit, it’s important to find an attorney who’s not afraid to go to trial if necessary.

How do you find such an attorney?

Ask them how many trials they’ve done. Lawyers who have never participated in a trial (or have done very few) tend to be wary of trials.

On the other hand, you don’t want an attorney to go to trial just to rack up attorneys’ fees when it’s not in your best interest. Ask the attorney how often they settle their cases. Is the percentage in line with the national average?