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How Do I Know If I Have A Good Settlement Offer?
Most
cases settle out of court before proceeding to trial. However,
not all cases settle for what they should. Sometimes, the
plaintiff ends up settling the case for a lot less than the
case is worth. Other times, the defense pays a premium to
resolve the case. How are you supposed to know if the settlement
offer being made is fair?
Some say that the measure of a good settlement is when both
parties walk away from the settlement unhappy. This means
that the defendant paid more than he wanted to pay, and the
plaintiff accepted less than he wanted to accept. Several
factors can provide guidance on whether the settlement should
be accepted. In general, if you can get close to judgment
value of the case in settlement, then it should be considered
a very good settlement.
One of the first considerations that attorneys and clients
should factor in is the chance of prevailing on the issue
of liability. If the other side is clearly at fault, then
a settlement offer should not be decreased because of the
risk of losing the case. If the plaintiff has only a 60% chance
of prevailing on liability, he may want to consider taking
40% less in settlement.
However, some cases do not involve clear cut issues of fault.
Often, the fault involved in a personal injury action may
be spread around. In other words, more than one party or person
may be responsible for the plaintiff's injuries.
In cases involving the fault of more than one party, any
settlement offer must account for that fault. This is difficult
if one of the parties at fault is not solvent or otherwise
cannot make a contribution toward settlement. Fault of the
plaintiff must also be factored into any settlement offer
if the plaintiff is partly responsible for his own injuries.
Thus, if the fault of others, including the plaintiff, is
reasonably evaluated to approximate 20%, then the settling
defendant should offer close to 80% of the plaintiff's damages
in settlement.
Another important factor to consider in assessing the fairness
of a settlement offer is the venue (the court jurisdiction)
in which the action is pending. Some jurisdictions draw from
jury pools that are more conservative or liberal than others.
If the court in which the case is pending draws from a more
liberal jury pool, then the settlement offer should take that
factor into account by being on the higher end of the range
of possible judgments to account for the fact that liberal
juries award more money to injured persons.
Most settlement offers will not take into account judicial
interest. Judicial interest is awarded to the plaintiff who
wins at trial. In an old case, the interest on the judgment
can be substantial. However, most defendants will not pay
interest in the settlement.
Unfortunately, the financial need of the plaintiff can result
in a diminished recovery. Defendants know that in some cases,
they can simply "wait it out," and the plaintiff
will take a lot less now because he cannot afford to wait
the period of years before the case proceeds to trial. If
the defendant knows that both the attorney and client are
willing to wait as long as it takes to recover the maximum
amount of money, then they are more willing to present a higher
settlement offer.
In serious injury cases, you should consult with an attorney
before accepting any settlement offer made by the other side.
The Cochran Firm - Dallas, L.L.P.
Turtle Creek Centre, Suite 1400
3811 Turtle Creek Boulevard
Dallas, Texas
75219
phone:
214.651.4260
| fax: 214.651.4261
Edward H. Moore is Board Certified, Personal Injury Trial Law. Unless otherwise noted, not certified by the Texas Board of Legal Specialization.
The statements and information provided on this web site are for the information of the recipient only. This site is not intended to provide legal advice and no attorney-client relationship should be deemed to arise from the receipt this page and its associated pages. |
Copyright © 2003 The Cochran Firm - Dallas, L.L.P.,
All Rights Reserved.
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