Auto-Accidents: Obtaining a Favorable Pre-Trial Settlement

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 What is a Pre-Trial Settlement?

A pre-trial settlement is an agreement between the parties to a lawsuit that outlines the payment for injuries and damages. Rather than taking the case to court and going through the long process of a trial and letting a judge or jury decide damages, the parties negotiate and come to an agreement to end the personal injury lawsuit. 

A pre-trial settlement can happen a couple of different ways. In one scenario the lawyers for the plaintiff (injured person) and the defendant talk to each other about the merits of their claim and defenses and, with permission from their clients, agree on damages. In other cases the parties agree to a pre-trial mediation, where a neutral third party mediator hears from both parties and helps move the negotiation forward to an agreement.

Can I Settle A Claim Without Going to Trial After an Auto Accident?

Yes, a claim can be settled without going to trial. In fact, most cases do not ever reach the trial stage of a lawsuit. The majority of cases are settled at some point earlier in the process through settlement negotiations. A settlement agreement is a way to avoid a costly trial and to conclude the case in a shorter period of time. Settlement agreements also allow attorneys to take on more cases than they would be able to if every case went to trial.

In some cases the parties will settle before a lawsuit is even filed. In cases where the facts are relatively clear and there is little disagreement regarding who was at fault, it is in the parties’ best interest to come to an agreement and save the time and money associated with filing a lawsuit. Often insurance companies are involved and they have a lot of knowledge and experience with the legal process. They too will want to avoid unnecessary costs and are usually open to engaging in settlement negotiations. 

What Points Should I Cover in Order to Obtain a Favorable Settlement?

It is important to understand that the purpose of obtaining a settlement is to avoid a trial. The plaintiff agrees to give up their right to pursue the claim further in court in exchange for some amount of money (to compensate the plaintiff for injuries, medical expenses, and/or property damage) or the performance of an action. Such as an agreement that the defendant will pay a mechanic directly to perform needed repairs to the vehicle involved in the accident.

Each party should know what they want from the other party before starting a settlement negotiation. You should meet with your lawyer and come to an understanding regarding what you want to get out of a settlement. Some things to consider and to discuss with your lawyer include:

  • Is a lawsuit really necessary and if so, or if it has already been filed, what are your chances of winning at trial?
  • How much money you think your case is worth after calculating all possible damages.
  • Keeping in mind the total damages, what is the minimum amount you will accept as a plaintiff, or the maximum you will pay if you are the defendant, in order to settle the case. It is important that you do not share this information with the other party until it is necessary.
  • Outcomes and settlement amounts from other cases your lawyer has handled with similar facts and damages.
  • The strengths and weaknesses of the evidence for and against your side of the case.
  • The amount of insurance coverage or other applicable financial resources available for settlement.
  • How much of any settlement will be allocated for attorneys fees and other costs.
  • The tax consequences of any settlement. 
  • In addition to monetary damages, are there other remedies that should be considered?

How are Settlement Payments Distributed in an Auto Accident Case?

The distribution of the settlement payment might depend on the amount of the settlement payment. Smaller settlements might be paid in one lump sum. If the settlement amount is very high, the plaintiff might prefer to receive a structured settlement. With a structured settlement the plaintiff will receive periodic payments over a period of months or years.

If the settlement will be structured, the defendant’s insurance company usually buys an annuity from an annuities company. They will pay the plaintiff’s settlement payments. The annuity company charges the defendant or their insurance company a fee in order to make a profit. 

In the case of larger settlements there might be tax and other financial considerations to keep in mind. This can be true for both parties to the lawsuit. It is important to consult with an attorney about all of the financial consequences of each type of settlement distribution.

What are the Advantages of a Pre-Trial Settlement?

Entering into a settlement agreement instead of going to trial can provide a number of advantages. These include the following:

    • Settlement is less expensive. Going to trial involves a lot of time and expensive preparation.


    • Reaching a settlement agreement is often less stressful. While not all trials are long and drawn out, the process can be stressful for everyone. Settlement negotiations, where both parties are interested in reaching an agreement, can be an easier process.


    • The damages awarded at trial can be unpredictable. Plaintiffs who win might find that they do not get the damages they hoped for. Defendants might end up being liable for much more than they anticipated. Negotiating a settlement before trial means both parties have more control over the damages.


    • The decision reached after a trial can be appealed. Appeals can take a long time, meaning a plaintiff must wait even longer before they actually receive their damages.


    • Settlement helps both parties achieve closure. Reaching an agreed upon settlement means both parties can move forward. Insurance companies can close their claim files and the question of how much one party will need to pay and how much the other party will receive will be answered.


    • A settlement agreement can protect both parties’ privacy. Settlement agreements are often confidential. The exact terms are private and many include a provision requiring the parties to keep the terms confidential. 


When Can I Get My Award After a Pre-Trial Settlement?

After a settlement agreement is reached the plaintiff will usually receive payment within 30 days. The settlement agreement document will typically state when the deadline is for making the payment. The agreement will state whether the payment will be in one lump sum or a structured settlement. The settlement agreement will also address whether any interest will be added to the original amount if the defendant does not pay when required.

Do I Need a Lawyer to Help Me with My Auto Accident Settlement?

You should have a lawyer to represent you during any settlement negotiations in an auto-accident case. A car accident lawyer has experience negotiating settlements in these cases and can advise you of the potential damages. 

An experienced attorney will be able to help you prepare for a negotiation or mediation. They can review the evidence for and against your claim and help you come to an understanding regarding what will be a favorable settlement. They can also draft the settlement agreement and make sure it includes the necessary terms to ensure you receive your settlement in a timely fashion.

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