If you have suffered injuries as a result of someone else’s actions or negligence, you can seek compensation using the legal process. You will have the option of settling before going to trial and, in some cases, you will be able to settle even before filing suit.
A voluntary settlement agreement where both parties have agreed on the value of the claim will save you time and avoid the hassle associated with going to trial. However, you might be wondering what a good settlement price is, since it can vary widely depending on a number of factors.
Before you start negotiating a personal injury settlement, there are a number of steps you must take to ensure you get the best deal possible.
Get medical attention
The first step in resolving your personal injury claim is to get the necessary medical attention. Your doctor will run all the necessary check-ups and prescribe the right treatment for you. This is crucial because only by knowing the type and extent of the injuries you have incurred will you be able to know how much money your settlement is worth.
After your doctor has ascertained your condition, the severity and the extent of the injuries, you and your attorney will be able to proceed to the next step in the settlement process.
Calculate special damages
Special damages or economic losses are damages for which money can act only as a comparable substitute. Known as the “out-of-pocket loss” rule, special damages include such things as:
- Lost wages
- Decreased or lost earning capacity
- Medical expenses and expenses for special equipment
- Funeral and burial expenses
- Property damage
If you keep thorough records of past economic losses you will be able to calculate special damages much more easily. Keep all records of past medical expenses, lost wages and medication that you have taken as part of your treatment – this will aid you in calculating the special damages that you are owed.
Figuring out future economic losses is a little bit harder as it will vary widely from case to case. A personal injury lawyer will usually suggest consulting a medical expert to testify with respect to future medical expenses that you will incur. An economics expert can also be consulted to find out an estimate to the financial losses that you will incur as a result of your injuries and reduced work capacity.
When it comes to calculating your lost earning capacity, the damages will usually be equal to the difference in your actual earnings from your projected earnings. That’s why your revenue is projected based upon your life expectancy and retirement age. An expert will take into account other factors such as income tax returns, W-2s, the state of the economy and industry you are engaged in, average salary of people working in the same industry that have a similar education and work experience and so on.
Calculate general damages
General damages, also known as non-economic losses, or losses for which money can only act as a rough substitute. Example of general damages are:
- Physical pain and suffering
- Emotional pain
- Loss of reputation
- Loss of consortium
- Shock and distress
- Loss of society and companionship
General damages are usually calculated at a rate of 1.5 to 5 times special damages, depending on the extent of the injuries.
Finding out the value of your claim
Once you’ve calculated the special and general damages, you must adjust the result to several factors:
- Liability. A higher settlement value will be awarded if liability has been established and there are no doubts about the defendant’s fault. However if liability is disputed or you are partly responsible for the injury, the settlement value will decrease in accordance to your actions.
- Plaintiff history and characteristics. Your own traits and characteristics can influence the amount you can be awarded. Things such as age, occupation, likeability and past medical history will influence the value of the settlement.
- Having multiple defendants means that there will be some kind of negotiation over who is going to pay more.
- Venue. Some venues will be more favorable for trial and may award higher personal injury damages than others. An insurance adjuster will take this factor in mind when calculating the settlement’s value.
- Mitigating damages. Courts look favorably upon injured parties that mitigate or have tried to reduce the damages. This means that if you refused to seek treatment right after your injury and, as a result, your medical expenses are now higher and your injuries harder to treat, the value of your claim may be reduced because you failed to mitigate.
Submit the settlement offer
Now that you have done all the steps all that remains is to submit the settlement demand letter to the defendant or his/her insurance company. Be aware that usually this process has much back and forth negotiation between the plaintiff and the insurance company in regard to the value of the claim.
However, if you do not reach a voluntary agreement, the next step would be to go to trial where a judge or jury will determine the value of the damages to which you are entitled.