If you sustain a personal injury in an accident caused by the negligence of another party, you deserve to receive suitable compensation in the form of a financial settlement. Pursuing a settlement is not a straightforward or automatic process, though. It is often necessary to go through extensive negotiations to secure satisfactory compensation, which begs the question of how lawyers negotiate settlements for their clients.
What Is a Settlement Negotiation?
Seeking compensation for your damages after an accident does not always mean you need to go to court. In most cases, it is possible to negotiate a settlement with the other party and their insurance company outside of court. This can be favorable for both sides because it means spending less time and money on litigation while also facilitating a mutually agreeable outcome.
Settlement negotiations often involve the injured person’s legal team and the at-fault party’s insurance company. It is also common to seek mediation in which a neutral third party guides discussions productively and collaboratively. Arbitration is also an option when the parties involved struggle to find common ground but still wish to avoid courtroom litigation.
What Happens During a Settlement Negotiation?
When examining how lawyers negotiate settlements, it is necessary to understand the overall steps in the negotiation process. It is a back-and-forth process that requires expertise in both insurance and legal matters in order to achieve the best result.
Determining Liability
Your attorney may conduct their own investigation into the case before negotiations even begin. The goal is to determine the other party’s degree of liability and collect evidence to establish that their negligence caused your damages. During this investigation phase, your legal team will also thoroughly evaluate your damages to determine how much your claim is likely worth.
Initiating Negotiations
Your legal team will send a demand letter to the insurance company representing the at-fault party. Having an attorney on your side helps ensure that the insurance company will not attempt to evade or ignore your request for compensation.
Extending Offers and Counteroffers
Once negotiations are underway, either party might put a settlement offer on the table. It is entirely possible that the insurance company might make an offer that is lower than what you expected to receive, and likewise, your lawyer might make an offer that is higher than what the insurance company is willing to pay. Both sides may continue making counteroffers while presenting compelling evidence until you arrive at a figure that is acceptable for both parties.
Drafting a Settlement Agreement
The settlement agreement is a legally binding document that marks the end of negotiations. Signing it means that the insurance company commits to compensating you for the agreed-upon amount.
Keep in mind that when you sign this document, it also means you agree to not pursue further action regarding the accident in question. It is important to make sure you are receiving a satisfactory settlement before signing an agreement. If it is not possible to arrive at a satisfactory settlement agreement, you might instead take the matter to court in pursuit of a court order for a more favorable amount.
How Do Lawyers Negotiate Settlements for Different Case Types?
Every personal injury case is unique, with different factors to consider and various degrees of severity that set them apart. These differentiating circumstances will greatly affect how lawyers approach settlement negotiations. Negotiations can differ greatly even between car accident case examples.
For instance, a car accident case involving a pedestrian might entail negotiating to establish that the pedestrian was not at fault and that the pedestrian is eligible for greater compensation due to the higher degree of risk to their person.
There are also cases when emotional distress can be a much more relevant factor in negotiations. A case involving a pregnant woman, for example, might take into account the fear and trauma the affected individual experiences out of concern for her unborn child.
When determining how the attorneys negotiate settlements, legal teams will carefully analyze the types of damages the injured person is eligible to receive, the types of parties who might be at fault and the circumstances of the accident. Each of these comes together in a myriad of ways to make the case unique, which is why it often takes a skilled lawyer to piece the strategy together like the complex legal puzzle it is.
How Can You Tell if You Are Getting a Reasonable Settlement?
Having an attorney at your side helps ensure that you get the best possible settlement from the other party. Your attorney can also help you understand if the insurance company is extending a fair and reasonable offer. Regardless of how attorneys negotiate settlements, though, it is always possible that the other party might try to lowball you or convince you to accept less compensation than your case is worth.
To know for yourself that you are getting a reasonable offer, consider whether it will fully cover your damages. You can make sure of this by having thorough documentation at the ready, including all relevant medical records and repair receipts. The settlement should pay for all accident-related damages as well as any loss of income you experience as a result.
There are also non-economic damages you might suffer as a result of an accident. These include emotional pain and suffering, disabilities and distress that you might sustain because of the other party’s actions. These damages are every bit as valid as economic damages, but they are more difficult to quantify. Expert testimony and legal counsel can help you factor these damages into your decision regarding whether a settlement offer is reasonable.
Why Might the Insurance Company Offer an Unfair Settlement?
When you know how much you deserve to get from a personal injury settlement, it can be easy to identify when the insurance company is lowballing you. You might understandably wonder why they would do this, especially if you have strong evidence on your side. Insurance providers are ultimately serving their own business interests and will therefore try to pay as little as possible.
Insurance representatives can accomplish this by twisting the terms of the at-fault party’s insurance policy in their own favor. They might leverage policy limits or dispute the severity of your injuries. Another tactic is to quickly extend a settlement offer and urge you to accept it promptly, knowing that you will be unable to request further compensation if you do accept.
To put it another way, a malicious insurance company might try to take advantage of your lack of expertise on the subject during a time when you are already feeling stressed and anxious. Lawyers can recognize these tactics and will work to protect you from them during settlement negotiations.
What Can You Do To Get a Better Settlement Offer?
The best thing you can do to combat lowball settlement offers and maximize your compensation is to cooperate and communicate with your legal team. Provide all the information and documentation your attorney needs while also being patient and understanding that the process can take a great deal of time.
Choose a lawyer who will thoroughly investigate the accident and organize the evidence in the most compelling way for your case. Your legal representative should be someone who can demonstrate their ability to negotiate with insurance companies on even terms. Even if the insurance company offers a lowball settlement at first, you can get a better offer by relying on a legal team that insurers cannot afford to underestimate.
What Tactics Do Attorneys Negotiate Settlements With?
When lawyers plan how to negotiate settlements, they must be willing to assert themselves and aggressively advocate for their client’s rights. Our personal injury attorneys at Sargon Law Group do this by tailoring our strategy specifically to the client and the circumstances surrounding the accident. We are trial lawyers who will not hesitate to fight for a favorable outcome in court if necessary.
An assertive tactic used by many lawyers during negotiation settlements is taking the initiative to propose a highly favorable settlement amount right away. The attorney can then navigate counteroffers with practiced expertise to pinpoint weaknesses in the other party’s arguments, naturally locating points of leverage.
In addition to being assertive, though, lawyers should also be willing to participate in mediation, especially if the other party seems willing to collaborate toward a swift resolution. Showing empathy when it is morally and strategically appropriate is an important consideration. At the same time, it is necessary to demonstrate a high level of competence in both the law and insurance terms that make it clear that the other party will be unable to take advantage of the client.
When Should I Involve an Attorney in Settlement Negotiations?
It is important to have an attorney on your side from the very beginning of settlement negotiations. In fact, it is often preferable to consult with an attorney as soon as possible after an accident. At Sargon Law Group, we eagerly assist Maricopa County residents with every step of the claims process, from reporting the accident to insurers all the way to finalizing a settlement.
The negotiation phase is the most important time to involve an attorney if you have not already. Waiting until after you feel like the insurance company is taking advantage of you can put you in a precarious situation. It is never too late to involve an attorney, assuming you have not signed a settlement agreement yet, but doing so earlier will help you avoid common pitfalls.
What Happens After a Settlement Negotiation?
If you accept a settlement offer from the insurance company and sign a binding agreement, the next step is to wait for the payment to process. Once it does, you can settle any outstanding legal fees with your attorney.
Keep in mind that some lawsuit settlements are taxable. However, IRC Code 104 states that there are exemptions for taxation on settlements from personal injury cases. This means that your settlement will likely not be taxable if you receive compensation for personal injuries.
If you do not sign a settlement agreement after negotiation, or if the insurance company is unwilling to settle whatsoever, then your next course of action is to take the matter to court. Litigation can be significantly more complex and contentious than out-of-court negotiations, so it is very important to retain reliable legal representation if this happens.
When Is Litigation Preferable to Negotiation?
In most cases, litigation is only preferable to negotiation as a last resort. When lawyers negotiate settlement offers, they will often explain to their clients that settling outside of court almost always leads to a better outcome. This is because of the time, effort and money involved in a courtroom trial.
Even so, litigation can be preferable when the other party leaves you with no other option to secure the compensation you need and deserve. Taking the matter to court might be the best and only option if the insurance company is unwilling to participate in good faith discussions or if there is a dispute that you cannot resolve without a court order.
It is important to keep in mind the need for an experienced litigation attorney if your case goes to trial. Many personal injuries specialize in negotiation and mediation, and might only be willing to assist with your case outside of court. At Sargon Law Group, we are trial attorneys who can see your case through to the end whether it resolves outside of court or even if it goes to a contentious trial.
Contact Sargon Law Group for Your Settlement Claim
After an accident leaves you with significant damage or severe injuries, you need a team that exemplifies how lawyers negotiate settlements. At Sargon Law Group, we proudly represent injured individuals in Glendale, Mesa and all across Maricopa County. Contact us today to learn more about how our Phoenix accident attorneys can help you throughout the negotiation and trial processes.