How to Prepare for Lawsuit Settlement Negotiations

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 How to Prepare for Lawsuit Settlement Negotiations

In the legal system, there are two sets of laws that are meant to hold a person accountable for their wrongful actions: criminal laws and civil laws. Criminal laws are the set of laws that are meant to punish a person for their criminal actions. Civil laws are the set of laws that are meant to hold a wrongdoer financially responsible for the damages that their wrongful actions caused.

When a person has been financially injured as the result of another person or party’s actions, then they are legally allowed to initiate a civil lawsuit against that person demanding payment for the damages in which they suffered. Civil litigation is the process by which civil lawsuits are handled and include the entire time period from when a civil lawsuit is initially filed to the time period after which the civil lawsuit is either settled or tried in a court of law.

The civil litigation process can often be very expensive, lengthy, and exhausting. Because of how expensive it can be to take a civil lawsuit to trial, most civil lawsuits often end in a settlement. A settlement is an agreement between the person that was allegedly harmed, known as the plaintiff, and the person that allegedly harmed the plaintiff, commonly referred to as the defendant.

In a settlement agreement, a plaintiff, or potential plaintiff, will agree to no longer pursue the civil lawsuit against the defendant in exchange for payment of certain damages or a cessation of action by the defendant. It is important to note that settlement agreements may occur before, during, or even after a civil trial has occurred. It is also important to note that most settlement agreements are in writing to ensure that both parties are legally bound to their agreement.

In most situations, a settlement will occur either prior to a lawsuit even being initiated or prior to a case going to trial. Once again, one of the main motivators for all parties to a civil lawsuit to settle the case is to avoid the costs of going to trial.

Examples of costs associated with a civil lawsuit include:

  • Filing and court costs associated with filing legal documents and initiating civil actions;
  • Attorney fees associated with reviewing legal documents, drafting legal documents, and filing legal documents, as well as representing one’s client in court;
  • Fees associated with expert witnesses which may be necessary in the civil lawsuit, especially in cases involving malpractice;
  • Fees associated with witness preparation or taking the depositions of witnesses to the civil action;
  • Fees associated with document retrieval and preparation; and/or
  • Fees associated with taking a case to trial, including trial preparation and hourly fees associated with an attorney’s appearance and representation.

As can be seen, there are numerous costs associated with taking a civil lawsuit to trial. This is why most statistics state that more than 95% of all civil lawsuits settle prior to the case going to trial. As such, it is important to understand effective settlement negotiation strategies in order to make sure that one is able to make the best recovery for the damages that they suffered due to the actions or inactions of another.

Examples of effective settlement negotiation preparation includes:

  • Effective Discovery: One of the most important phases of civil litigation is the discovery phase. In the discovery phases both parties will make requests for documentation and send the other party a list of questions, known as interrogatories, that they must answer under oath. Conducting effective discovery is essential in being able to thoroughly prepare for settlement negotiations, as well as obtaining the evidence necessary to prove the elements of the civil action;
  • Know the Law: The next most important step in preparing for settlement negotiations is knowing the laws that apply to one’s case. This means a person should understand all of the case law, civil statutes, facts, and evidence of their case;
  • Understand One’s Damages: A person should also be aware of the damages that they suffered, which will typically mean they should get quotes regarding how much property damages they suffered, gathering medical bills, and getting quotes as to any future medical treatment that may be needed; and
  • Anticipate Arguments: The final most important step in preparing for settlement negotiations is to anticipate the other side’s arguments and prepare counter-arguments for those arguments. Although a person will not know exactly what may happen in the negotiation room, they should have strategies and counters prepared for arguments that will be made by the other side.

How Long Does It Take To Negotiate a Settlement?

As far as how long it takes to negotiate a settlement, that will be dependent on a variety of factors, including the complexity of the lawsuit and the amount of damages that are being claimed. Typically for claims that involve an insurance company being involved, such as with personal injury cases involving a crash, the amount of time to negotiate a lawsuit is typically on the shorter time side.

However, for more complex personal injury lawsuits, such as a medical malpractice lawsuit, the amount of time necessary to negotiate a settlement will often be much greater. Further, for cases involving complex family matters, such as divorces involving children, negotiating a settlement between the two parents will often take a greater length of time.

One of the most commonly settled civil lawsuits are personal injury cases involving a collision between two insured vehicles. In a claim for personal injury, the plaintiff will claim that they have sustained an injury due to an act or failure to act by the defendant, such as failing to obey the laws of the road. If the plaintiff is successful in their claim, a court may award the plaintiff monetary damages for their personal injury.

Typically when an automobile crash occurs, one party will alert the authorities who will then arrive at the scene and generate a police report. Then, within that police report, the authorities will typically cite one of the parties for a traffic infraction, such as failure to maintain a safe following distance or speeding.

The party that was not cited will then typically send a copy of the police report and their claim for property and personal damages to the defendant’s insurance company who will then review the claim. This process is known as making a settlement demand to the defendant’s insurance company. The defendant’s insurance company will typically be given a set amount of time, such as two months, to respond to the demand for payment or the plaintiff will initiate a civil lawsuit.

In most cases, the defendant’s insurance will make the payments for the plaintiff’s personal and property damages in order to avoid any further costs. This is because the police report is typically enough evidence for an insurance company to evaluate a claim on and avoid further costs of civil litigation.

What Are Some Settlement Negotiation Examples?

As mentioned above, there are numerous periods in which a case can settle during the civil litigation process. One of the most common ways in which a case settles is by the plaintiff sending the defendant a settlement demand letter, which outlines their claims, damages, and demands payment in exchange for not pursuing a civil lawsuit.

Other common examples of alternative dispute resolutions and settlements include arbitration and mediation. Mediations typically occur after a civil lawsuit has been filed and the discovery phase has been conducted. In a mediation, a neutral third party, known as a mediator, will bring in both parties and attempt to reach a settlement.

The purpose of the mediator is to listen to arguments by both parties and then take offers back and forth between the two parties until a settlement is reached. If there is a settlement that is reached in mediation, it will then be solidified in a mediated settlement agreement.

Do I Need an Attorney to Negotiate a Settlement?

As can be seen, there are numerous different strategies necessary in negotiating a settlement. As such, if you have been damaged by the actions or inactions of a third party, or if you have been civilly sued by another party, then it is in your best interests to consult an experienced personal injury attorney.

An experienced personal injury attorney will assist you in gathering all of the documentation needed to successfully prepare for a settlement, as well as assisting you in making a settlement demand. An attorney will also be able to initiate a civil lawsuit on your behalf and ensure that any settlement reached is legally enforceable and in writing. Finally, an attorney will also be able to represent you in court, should settlement negotiations fail.

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