What is my case worth?
How do lawyers and insurance companies evaluate what is a fair settlement?
Of all the inquiries my Chicago personal injury law firm receives, this is one of the most common questions we receive. I am going to try to, in a very general way, address some of the myths and realities of how lawyers and insurance companies evaluate personal injury suits for settlement.
Before we go any further, I want to make clear that none of what I am about to say applies to worker’s compensation cases. There are a few reasons for this. Worker’s compensation cases are resolved through an entirely different system that personal injury cases, so the rules of how those cases are resolved are totally different. For example, worker’s compensation is a no-fault system, while the issue of fault is a crucial element in assessing damages in a personal injury suit. Trying to compare Illinois worker’s compensation cases to personal injury suits in Illinois is an exercise in comparing apples and oranges. Also, there are different rules for damages in wrongful death suits in Illinois, and those are addressed elsewhere in this web site.
The simple answer to what a case is “worth” is that it is worth whatever a jury decides it is worth. Once a jury enters a verdict, that is what the case is worth. However, statistics show that about 95% of all cases get settled somewhere short of trial, and the truth is that most people would prefer to work out a fair, out-of-court settlement. The troublesome question is how do you determine what is a fair settlement. That is what we hope to answer here.
Let’s start by dispelling a few myths about trying to settle Illinois personal injury suits:
• An insurance company is not required to make you a settlement offer. Many times, in auto accident suits involving low-quality insurance companies or in medical malpractice suits, there is never a settlement offer made.
• There is no “standard settlement” for any type of case. In particular, the “three times medicals rule” is a myth. At one time, with simpler cases, most cases settled for approximately three times the medical bills. However, that practice was abused and in fact never really made sense at all. That “rule” to the extent that it was a “rule” has been abandoned.
• The defendant will not want to settle at a premium to avoid bad publicity. There may be cases where this is true, but the vast majority of suits never generate any publicity at all, and when that happens, very seldom are there any lasting effects from a news story. You should not count on bad publicity boosting the value of your settlement.
• All you have to do is look at other cases to determine what your case is worth, and if you have a case like another one, your case should be settled for the same amount. While the types of verdicts and settlements that have been returned for similar kinds of cases is something that experienced Chicago personal injury lawyers consider, no two Illinois personal injury suits are the same. By way of example, a scar from a dog bite on the face of a girl is considered far worse than the same dog bite scar on the face of a boy. Other cases are helpful, but should not be considered as anything more than helpful information.
So what do lawyers and insurance companies look at it in trying to determine how much a suit should be settled for?
There are three really crucial questions: liability, the nature of the injury, and damages. These are the most important factors in determining the settlement value of Illinois accident suits.
In addressing the question of liability, if you have a poor liability case or there is evidence of contributory negligence, these are crucial factors in determining the amount of a fair settlement because if there is a chance of a “not guilty” verdict, this greatly affects the settlement value. By a poor liability case, I mean that there is a reason to believe that a jury could find that the defendant was not negligent in causing the accident or that you have difficulty in proving an important part of your case, for example the cause of the fall in a slip-and-fall accident. In terms of contributory negligence, juries in Illinois are asked to assess the degree of fault of the injury victim and the defendant. If they assess any blame to the plaintiff for being negligent in causing his or her own injuries, the amount of damages are reduced proportionately. For example, if a jury found that the plaintiff suffered damages of $100,000 but was 20% at fault in causing the accident, the plaintiff would receive $80,000 – the total amount of her damages reduced by 20%. This is true all the way up to the 50% threshold, and once the jury finds the plaintiff over 50% at fault, the jury is required to return a “not guilty” verdict. There are also other defenses which may apply to some cases which can result in the dismissal of the case, and when those potentially apply, these can affect the assessment of liability.
The nature of the injury is also an important factor in assessing the fair settlement value of an Illinois personal injury suit. As a general rule, the more severe an injury is, the higher the settlement value will be, all things considered equal. However, the injury must be caused by the accident which is at issue in the suit. If for example, there is a pre-existing condition, prior injuries to the same part of the body, or there is reason to think that something else caused the conditions that the plaintiff is claiming resulted from the accident, this can affect the settlement value as well. This is a common issue which comes up in cases involving neck or back injuries. Medical documentation is key, but you should understand that insurance companies view these records with a keen eye towards disputing issues of medical causation and often call upon the services of shady medical “experts” to dispute medical causation when there are no legitimate grounds for dispute.
The final factor is the damages which have resulted. The law in Illinois allows an injured person to claim the following items as damages in a personal injury suit:
• Past and future medical expenses;• Past and future wage loss;• Past and future pain and suffering;• Disability, also referred to as loss of a normal life;• Disfigurement; and • Emotional distress
There are a number of other factors that come to bear in evaluating a case for settlement: verdicts and settlements in other cases, the insurance companies involved, the amount of insurance coverage available, the financial condition of the defendant, the amount of case file expenses incurred, the projected case file expenses in the future, how far along has the case progressed, the appearance and availability of supporting witnesses, the quality of the client as a witness, how supportive are the treating physicians, the desires of the client, and the client’s obligation to pay for accident-related medical care.
As an experienced Chicago personal injury lawyer, I take all of these factors into account when I make a settlement demand to the insurance company and in making recommendations to the client regarding settlement.
I have an ethical obligation to advise the client of any settlement offers made and to make recommendations to the client regarding settlement. In the end, the client is the one who gets to make the decision about whether to accept or reject a settlement offer.
The process of reaching an evaluation of the fair settlement value of a Illinois accident suit is a lengthy one, involving a careful review of the facts of the accident, the nature and extent of the injuries as shown by a careful review of the medical records, and consideration of all of the other factors that affect the fair settlement value of a case. It is not something which can be done during an initial phone conversation or even during an initial office meeting.
We strongly believe that lawyers who are prepared to make quotes to clients over the phone or during an initial meeting without doing the careful work which is required to properly evaluate an Illinois personal case either does not know what they are doing or are doing a sales job on the potential client. Either way, if you are dealing with a lawyer who is prepared to tell you what your case is worth based on a phone consultation, you should seriously consider hiring someone else because hiring a lawyer who does is one of the most common mistakes that people make in hiring a lawyer.
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