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The Difference Between a Settlement and a Lawsuit

settlement vs lawsuit

The time after an accident can be very confusing. You have to decide what to do next regarding your expenses and damages. According to principles of tort law, if an injury is caused due to another party’s negligence, you are entitled to compensation for the damages suffered as a result of that negligence. Accident victims have a choice between settling a case or pursuing a lawsuit against whomever is responsible for injuries. Understanding how this process works in personal injury cases can help in making the best decision for your case.

Retaining Legal Help

It is always best to gain the help and advice of a lawyer as early in your personal injury case as possible. This means that you should call an attorney promptly after a car accident or other incident from which you sustain injuries. By talking to a lawyer early in the process, you can learn more about your legal rights and how to gain the compensation you need for costs incurred and damages suffered.

Having an injury lawyer on your side early also helps to prevent you from making any mistakes that may negatively affect your case. Examples of such mistakes include making statements to the defendant that can later be used against you. Personal injury lawyers are highly experienced in personal injury claims that include:

  • Auto accidents
  • Slip and falls
  • Premises liability
  • Defective products
  • Medical malpractice
  • Other personal injury cases

Filing a Claim

The victim must often file a claim against the defendant’s insurance provider. If injuries were sustained due to an auto accident, the defendant’s auto insurance policy will be involved. When the case is because of an accident on the defendant’s property, the homeowner’s or property insurance company will be involved. For other types of accidents, commercial insurance carriers may be party to the case.

Personal injury attorneys assist the victim throughout the case, including for filing of the claim. The lawyer may also help the victim prepare a statement about the accident and advises the victim of things they should not do, such as allowing an insurance company to record a statement from them without the lawyer being present.


Stages of Claims

Claims go through case stages after an accident, which may include some or all of the following:

— Investigation
The insurance company of the negligent party will conduct an investigation after a claim is filed against them. This investigation will determine who or what caused the accident, where responsibility lies and if the victim is responsible in any way.

The victim’s attorney may also conduct their own investigation to compile evidence to back up the claims of the victim. This investigation may include taking photos of the scene of the accident and documenting injuries suffered by the victim.

— Negotiation
After the investigation, the victim’s lawyer will likely negotiate with the insurance company and/or the defendant.

— Demand Letter
A demand letter is often sent by the personal injury lawyer to specify why the victim is entitled to compensation after the accident. This written notice will provide details of the accident and the victim’s injuries. A specific valuation of the damages may be specified in the letter.

— Counter Offer
Demand letter amounts are rarely accepted by insurance companies without a counter offer. When the insurance company provides a counter offer, the victim’s lawyer will help the victim decide if that amount should be accepted, negotiated further or rejected.

— Settlement
If the victim and the insurance company come to an agreement regarding claim value, the case may be settled out of court. The victim will likely have to sign an agreement stating that he or she will not make any further claims against the defendant or their insurance company. Settlement money can then be exchanged.

— Filing a Lawsuit
When negotiation fails to bring all parties to an agreement, the victim has the right to sue. Filing a lawsuit starts the litigation process with a complaint filed with the court by the plaintiff’s attorney on his or her behalf. This complaint specifies who the parties in the case are, the victim’s residential address, jurisdiction of the court and legal basis for claim recovery.

A filed lawsuit makes a request for damages in a specific dollar amount. A sheriff, private process server or other mechanism recognized by rules of civil procedure in the state then serves the defendant with the complaint. A specified time period is provided for the defendant to respond. If the defendant does not respond before the deadline, a default judgment is made. Each jurisdiction provides its own time period for a default judgment, with the most common time period being thirty days.

Filing a lawsuit does not automatically send a case to a jury trial. The defendant can still opt to settle the case with an acceptable settlement offer. If the parties come to an agreement, the case is removed from the court docket. Cases are dismissed for other reasons, such as:

  • Case is without legal basis for recovery
  • A judge’s summary judgment is made based on state law

 

If you have been the victim of an accident or personal injury due to someone else’s negligence, you should seek the advice of a personal injury lawyer. An attorney can advise you regarding options in your case and whether it may be best for you to settle the claim with the insurance company or pursue litigation based upon the circumstances of your particular case.

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Aaron Crane Personal Injury Lawyer

Aaron Crane has been a Phoenix personal injury lawyer for over 14 years and is highly trained in all areas of injury law, car accidents, wrongful death, medical malpractice, injury tort and other areas. Visit his profile to learn more.
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