Mistakes People Make Trying to Settle Their Own Cases
Pam: So Barry, do people need a lawyer to settle their own case?
Barry: Well not every case really requires the help of a lawyer. If you’re an adult, you get to make your own decisions, including bad ones that can cost you thousands of dollars. The real issue is whether or not you should get a lawyer instead of whether you need to get a lawyer.
Pam: Why? What do you mean by that?
Barry: Some of the toughest situations I’ve come across as a lawyer have been cases where somebody tried to handle their case on their own and did something along the way before they decided that they needed legal help, which really either cost them a lot of money or cost them a significant delay in the resolution of their case. And a lot of times people are just reluctant, for whatever reason, to get legal help when it’s needed.
Pam: So what are the common mistakes that you’ve seen people make when trying to negotiate their own settlement?
Barry: The first common mistake I really see people making is starting to discuss settlement with the insurance company before their medical care is complete. In my law firm, one of our real rules of thumb is that we don’t even think about settling a case until you’re either all better, as good as you’re going to get. And when you start having those discussions with the insurance company before your medical care is complete, you’re missing one of the big pieces of the puzzle, and that’s what your ultimate outcome is going to be. But at the same time, you’re really cueing in the insurance company to what it is you really want, and it really becomes a formula for short changing yourself.
Another common mistake I see people making is jumping on settlement offers that are made early. One of my fundamental beliefs is that early settlement offers made by insurance companies, especially when somebody’s not represented, tend to be good ones for the insurance company but really cheap ones for the person who’s been hurt. A lot of times these settlement offers are made before the person who has been hurt has a full understanding of the nature of their injuries or of their obligation to reimburse other people portions of the settlement proceeds.
Another common source of mistakes I see people making is negotiating without having a full understanding of the nature and extent of your injury. Now the nature and extent of your injury is something that’s going to be really spelled out in your medical records, and as part of the investigation process, insurance companies will ask you to sign a medical authorization, which will give them the ability to access your medical records. And so often, you’ll see people trying to negotiate with the insurance company when the insurance company has their medical records, but the person who’s been hurt doesn’t, and you’re really trusting the insurance company to accurately represent what’s in the medical records and their significance, which sort of is a fool’s errand.
Pam: Any other mistakes you see being made with some frequency?
Barry: One of the biggest mistakes I see is heading in to settlement negotiations without knowing the full amount of the insurance coverage. Now that’s not a really significant issue when the injuries themselves are fairly minor, but when they’re really significant injuries, it can be a big deal indeed.
I’ll give you an example of this. I was representing a woman who was involved in a car accident. Ultimately, she ended up getting both her hip and her knee replaced as a result of the accident. The gentleman who hit her was a banking executive. He was picking his boss up from the airport in his personal vehicle. On his personal vehicle, he had a grant total of $50000 worth of coverage, but because he was doing something that was employment related, the bank’s insurance policy was also available to cover that accident. And the bank had a total of $25,000,000 in coverage. Had we been limited to the amount that was on his personal vehicle, the most we probably would have gotten for this lady was $50000. We were able to get her, obviously, a much more significant amount of money because we had the insurance coverage for the bank also available to us.
And this is a scenario which is something that has played itself out over and over in my practice where, by digging in a little bit deeper, we found more insurance coverage and have been able to get a significant amount more money for the client in the way of a settlement.
Pam: All right, big picture. What do you see as the biggest mistake people make?
Barry: The biggest mistake I see people making is that they go into this not really understanding what the process is and how all the pieces to this come together, and then as a result, they get further and further into the process and not get legal help when they really need it.
Pam: Okay, so Barry, what are the signs that you look for in saying someone should seek legal help?
Barry: There are basically five questions that you should be asking yourself. The first of these is, are there any issues regarding liability that aren’t being conceded? If liability is being contested, you should be getting legal help.
Secondly is, do you understand what the claims process is? Do you understand what’s going on, how things have to be resolved?
The third issue that people need to be considering is, do they understand what their medical records say and the significance of what’s in their medical records?
The fourth item that they need to look at is, do they understand how to evaluate a case for settlement in terms of taking into account some of the issues that we’ve talked about today in terms of the issue of liability, the nature and extent of their injuries and what their overall damages are.
And the last of these five issues that people really need to take into account is, are there going to be any complicated issues regarding reimbursement out of the settlement proceeds? And this is something that in truth, has really become a much more complicated issue over the years that I’ve been practicing law.