You may have heard most personal injury cases end with a settlement agreement, but do you know what a settlement agreement means?
Below, we discuss what you need to know about personal injury settlement agreements, including how they are negotiated and what happens after both parties sign them.
If you were injured by another’s negligence, our experienced Lafayette personal injury attorneys may be able to help you negotiate a settlement to help you move forward. There are no upfront fees for our services and our lawyers are not paid unless our clients get paid.
Negotiating a Settlement
Settlement negotiations typically begin after the injury victim reaches the point of maximum medical improvement. At that point, the victim’s lawyer sends a demand letter to the liable party’s insurance company. The demand letter requests a specific amount of money to settle the claim. The demand letter also details the claims against the at-fault party, along with evidence to back up those claims.
Once a settlement offer is made, the other side can accept it, reject it, or make a counteroffer. Typically, there are multiple counteroffers before both sides reach an agreement on a settlement.
Insurance companies and lawyers for injury victims are often far apart in the amount of compensation they will agree to. Insurance companies typically offer far less than the victim is seeking, while attorneys may start off with a number that is above what they would be willing to accept to resolve the case.
What is Included in a Settlement Agreement?
There are multiple parts of a settlement agreement, as it is a legally binding contract between two parties.
Terms of the Agreement
Settlement agreements list the terms of the agreement, which may include:
- Legal issues that have been resolved by the settlement
- Your rights and obligations along with the rights and obligations of the at-fault party
- How sensitive or confidential information will be protected
- How the settlement will be paid out
- How to resolve disputes that arise under this agreement
There are two options for payment of a settlement: lump sum payment or structured settlement. With a lump sum, you get all the money at once. With a structured settlement, compensation is paid out in a set number of payments.
Many victims receive a lump sum payment. However, a structured settlement may be appropriate for a minor child to prevent the child from recklessly spending the entire settlement.
Release from Liability
Settlements also include a release from liability, which releases the insurance company/at-fault party from future liability over the same injury. By signing the agreement, you are forfeiting your right to seek more compensation for your damages from the same party you settled with.
Even if your injuries get worse or your damages end up costing more than you initially thought, you would be unable to seek compensation from the same party you settled with.
There would be no reason for an insurance company or at-fault party to settle if you could still file a claim. The settlement effectively ends the claim – victims will not receive compensation until the settlement agreement is signed, making the release from liability legally binding.
What About Liens and Attorney Fees?
Injury victims often enter into agreements with medical providers and/or health insurance companies to wait to collect payment. Health insurers may also decide to cover the costs up front until a settlement is reached.
Medical providers and health insurers may place liens on your settlement to collect payment. Typically, these need to be paid out and resolved before the victim receives compensation from the settlement.
After liens are taken care of, attorney fees are typically taken out before a check is sent to the victim. The victim receives what is remaining after attorney fees and liens are paid out.
At Galloway Jefcoat, we discuss our fees before taking on your case, so our clients know what to expect.
What Are the Pros and Cons of a Settlement Agreement?
Settling a case is often much less expensive than going to trial, as there are so many additional costs. Going to trial also takes longer, which means it takes longer to receive your money. When you settle, the agreement is confidential between you and the other party. A court case becomes part of public record.
However, sometimes victims want their case to become part of public record. Another disadvantage with settling compared to going to court is you could end up recovering more compensation in court than through a settlement. That is because the value of your compensation award is in the hands of a jury and not the insurance company.
That said, you can never be sure about the outcome of a trial. You might not get any compensation. With a settlement, you know you are at least getting something.
Contact Galloway Jefcoat for Legal Help After an Injury
Galloway Jefcoat’s licensed attorneys have negotiated countless settlements on behalf of injury victims. However, while most cases settle, we are also prepared to go to court. It is important for your attorney to be ready to go to court because it may help push insurance companies to make a better offer to avoid the courtroom.
If you have questions after a personal injury, give us a call to discuss possible legal options. An initial consultation is free and there are no upfront fees if we represent you.
Galloway Jefcoat. Millions Recovered. Call (337) 984-8020.