An August 8, 2008 article in the New York Times discussed an interesting study concerning whether or not consumers are better of taking their case to court if they don’t like the settlement figures. The research followed 2,054 cases that went to trial from 2002 to 2005. In 61% of the cases, consumers would have been better off taking the settlement offer. Insurance companies made the wrong decision only 24% of the time. The vast majority of all cases settle out of court. The ones that end up going to trial primarily do so for three reasons. The biggest reason is a dispute over fault. If both sides say they had the green light it makes it very difficult to settle. The next big reason is a fight over medical causation. An insurance company may feel the accident victim’s injuries weren’t all caused by the accident. Sometimes people have pre-existing medical problems or have the unfortunate luck of getting hurt somewhere else after an accident. The final reason is the age old dispute over value. Either the insurance company thinks the offer from the injury victim’s lawyer is too high or else the victim wants more than what’s offered by the company. Every case is different of course, and it would be wrong to conclude that you should always take the insurance company’s offer because of the results of this study. The study also doesn’t show whether or not the lawyers handling the files were specialists in the field. Oftentimes lawyers specializing in personal injury law find a case not being handled properly by another lawyer. Some lawyers have very little litigation experience or just don’t do well in a courtroom. Still, if you can get a reasonable offer without going to trial it usually makes sense to settle the case. Even if you recover more than the offer at trial, you need to factor in all the extra court costs to see if your net recovery is any better. And then there is always the large amount of time, stress and anxiety associated with a trial. As an old lawyer once told me, “Trials are like surgery. The operation may be a success but you still get all cut up”.
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