A personal injury lawsuit is initiated when an aggrieved party, called the plaintiff, file a complaint with a court against a defendant. A trial may commence to allow the plaintiff and defendant to argue their sides before a judge or jury decides liability. In some circumstances, the case is settled prior to the start of a trial.

What is a Settlement?

A settlement is a legal term referring to parties who resolve their legal differences without going through a trial. The parties negotiate a settlement. The settlement typically involves money. A settlement can be formal or informal. A formal settlement occurs during a settlement conference where parties meet in a formal settling like a courthouse to resolve differences.

What is an Informal Settlement?

An informal settlement usually happens early on in a court case. An informal settlement commonly occurs out of court. For example, a party will give the other a settlement offer. The other party may agree to the offer or present a counteroffer. This is generally the start of negotiations.

What is a Settlement Offer?

A settlement offer is an agreement to reimburse or to be reimbursed for payment regarding some loss or injury. A plaintiff can submit an offer to a defendant based on expenses such as lost wages and medical bills. A defendant can submit an offer to settle the case.

Do I Have to Accept an Informal Settlement Offer?

No. Neither a plaintiff nor a defendant is required to take an informal settlement.

What Happens if I Agreement to the Informal Settlement Offer?

A written settlement agreement is drafted and signed by both parties. In order to receive payment, the plaintiff gives up all rights to sue later for any present or future injuries related to the accident. The lawsuit is withdrawn.

Do I Need to Talk to an Attorney about an Informal Settlement?

Yes. An informal settlement can be difficult for a plaintiff to negotiate without the help of a personal injury attorney. There’s no way a plaintiff can determine whether the settlement is fair or not.