How Do Personal Injury Settlements Work?

By definition, a settlement is an agreement between parties where you accept compensation for your damages instead of continuing to move forward to trial and releasing one another from any other legal actions or claims. For a personal injury settlement, the injured party or parties agree to receive a certain amount of compensation and in exchange, release the party or parties that injured them from any and all liability. 

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How Is a Personal Injury Settlement Amount Calculated?

One of the most common questions we get asked is what is the usual amount of a settlement in a personal injury case? The value of a personal injury settlement is based on proven facts of each case and the most important aspect is the damages caused. The facts of the case and documented treatment, medical expenses and certain other factors all are considered in calculating damages which is the most important factor in a personal injury settlement. 

Settlements are usually based on a variety of documented factors regarding your damages as a result of the incident. Your injury lawyer should combine all related damages in your case and submit them to the insurance adjuster with a demand to negotiate a settlement for your legal claims. Those damages include but are not limited to; medical bills, wage and personal property loss, and pain and suffering. The insurance adjuster will review the package and contact you with an offer. Your lawyer will then negotiate with the insurance adjuster and settle your case with an agreed amount for compensation based on the authority you’ve given them.

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What is the Usual Result of a Personal Injury Settlement?

A settlement resolves your case and provides you with compensation. This allows you to pay your medical bills, receive reimbursement of your lost wages, and be compensated for your pain and suffering. The costs at your settlement are usually minimal. It prevents you from having to litigate your case which is costly and time consuming. It puts compensation in your pocket now rather than several years later.

How Much Should I Ask for in a Settlement?

There is no hard set formula for how much you should ask for in a personal injury settlement case. It has to encompass all the allowable damages that were caused by the Defendant’s negligence. This can include different types of damages such as special damages or pain and suffering depending on State law. Specials are the combination of your medical bills, wage loss, destroyed personal property, and pain and suffering. Although there is no hard and fast rule, providing the insurance company with all of your special damages with a fair evaluation of the case is still required and the way most settlements are negotiated. This allows your injury lawyer to ask for enough compensation to include reimbursement of those medical bills, wage loss compensation, personal property loss, and pain and suffering. The area that is  most negotiated in Ohio (and many fault based States) is pain and suffering. If you have an attorney, you need to include attorney fee which is usually one-third of the gross settlement.

Why Do Most Personal Injury Cases Settle?

Personal injury cases settle because the risk, expense, and anxiety of a trial far outweigh a settlement. Trials take a very long time to have a jury hear your case. When you settle your case, you are 100% guaranteed to receive compensation. If you go to trial, however, you may get more but you can also not be awarded anything by the jury.  Although it might be lower, a settlement guarantees you compensation more or less immediately whereas a trial may be uncertain, take years, and the costs of trial can exceed your compensation. A jury verdict may be higher, but more of a gamble. The injured Plaintiff often will consider taking a little less in a settlement as the defendant makes an offer to pay now rather than later to avoid the expense of trial. The verdict could go either way. For you, the risk of a verdict coupled with the expenses, precludes taking the case to trial.

What this means for you is that if you accept the settlement, you are guaranteed to receive 100% of the offer. If you reject the offer, a study by the Bureau of Justice Statistics in 2005 indicates a 50/50 chance of recovery. That is either you will receive more than the settlement offer, or you will receive nothing.  Moreover, your case can and often does take many years to resolve. In addition, your case can be dismissed by motion or referred to a new judge. Some states have caps on damages which will reduce a jury verdict to the maximum statutory cap. What is the average compensation in personal injury cases?

How Long Does it Take to Get Paid After a Settlement?

In a typical personal injury case, once the settlement is agreed upon and the legal release is signed, the funds are usually sent immediately. Depending on if the funds are sent overnight or via regular mail, it can take anywhere from 7-10 business days to receive the settlement check. Your injury lawyer will usually deposit the funds in their attorney IOLTA trust account and so it takes an additional 2-3 business days for the funds to clear. All in all, you could expect about 14 business days from when the settlement release was signed and you received the funds.

Are Personal Injury Settlements Public?

Jury verdicts in serious personal injury cases can reach into the millions. Major verdicts are public and tend to make headlines after being reported in the major news outlets. Settlements, however, usually are never reported and do not make the front page. Most settlements are private due to nondisclosure agreements. In addition, they tend to be lower than jury verdicts and thus less exciting. Still learning how settlements are reached and controlling expectations, will assist both you and any family member who is going through the settlement process. As to civil settlements, many of them settle at some stage of the case especially where there is clearly established liability and damages. A settlement can take place at any time, from pre-suit until after appeal. 

About the Authors: Sawan & Sawan is a multi-generational, family owned law firm practicing law in the areas of car accidents, truck accidents, insurance claims, personal injury, and more. Our firm practices law in Ohio (Toledo, Columbus), Georgia, and Michigan.

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Dennis P. Sawan

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Christopher A. Sawan


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