It is a well-established fact that most personal injury lawsuits never go to trial. It is also a well-established fact that most of these cases are settled out of court. Either way, getting the money you need if you were hurt in an accident someone else caused takes time.
If you’re in a dire financial situation, that’s the last thing you want to hear. Fortunately, you may be able to get legal funding. If so, it will provide financial relief while your personal injury case is ongoing.
In the meantime, learning about lawsuit settlement and negotiation strategies may give you a better understanding of what is going on behind the scenes. And that may provide some peace of mind.
The importance of negotiations
The settlement of any legal dispute hinges on successful negotiations. But what are negotiations, and how do they work?
Negotiations are best described as discussions between two people – or their representatives – at odds over one or more issues. The talks are specifically designed to help the parties reach a satisfactory agreement.
Preparation is key to productive negotiations. By the time the talks get started, it’s a good bet that each party knows about the other’s position. It’s also a good bet that each one knows about the other’s strengths, weaknesses, arguments and counter-arguments.
But unlike litigation, this is not an adversarial process. This means the parties do not argue about the facts and issues at hand. Instead, the parties take turns explaining what they want and why. In other words, one side says, we want this and this is why. The other side says we can’t give you that. But we can do this. The back-and-forth continues until the parties reach an acceptable agreement.
If you find yourself in financial difficulty while negotiations are ongoing, one solution maybe to pursue pre-settlement funding to help cover routine expenses.
Settling a personal injury case
In a personal injury case, issuance of a demand letter by the plaintiff’s attorney usually triggers negotiations with the defendant’s insurance company. This is the letter in which the personal injury lawyer says:
- This is what happened
- This is the extent of my client’s injuries
- It is your policy holder’s fault
- These are the financial and non-economic damages incurred
- Compensate my client accordingly now, or we will take this to court
At this point the plaintiff’s lawyer will provide evidence to support his or her contention.
In return, the insurance rep may make an immediate settlement offer. This will generally happen for two reasons. First, the insurance company wants to avoid the effort and expense of personal injury litigation. Second, the insurance company hopes – or expects – that the injured party needs and wants the money quickly.
Seasoned professionals on both sides know this initial offer represents far less than the case is worth, and seldom worth accepting. So the negotiations continue. The plaintiff’s attorney makes a new demand – this one reflects a lesser amount than he or she initially requested, but more than the first offer.
Depending on the facts of the case, this process may drag on, or it may end with an acceptable settlement fairly soon. If you are a plaintiff in pending personal injury litigation, be prepared to wait. And don’t be surprised if the talks stall. Your attorney will probably leave the door open for further discussions, even as he or she continues to prepare your case.
In the meantime, if you are in urgent need of financial relief, you may want to consider asking friends or family for a loan to tide you over. Or, if you have decent credit, you may want to consider a getting a personal loan or line of credit. In a worst-case scenario, you could also use credit cards to cover daily expenses until you get your settlement or judgment. Alternatively, you could apply for consumer legal funding, which is sometimes referred to as a lawsuit advance or pre-settlement funding, depending on the nature of the agreement you enter into.
The latter is financial relief made in the form of a cash payment in exchange for a portion of your pending settlement or judgment. In most cases you don’t need to worry about credit checks or other screening, like with a loan when you apply. You don’t have to worry about repaying prior to your settlement. Instead, the amount provided, plus fees, are deducted from your final judgment or settlement.
Negotiating from a position of strength
Legally there are few restrictions on when negotiations or settlement talks in a personal injury matter start, end, or how long they may take. The only general requirement is that the parties reach a settlement prior to the issuance of a final court order.
However, negotiating from a position of strength will improve your chances of reaching a suitable settlement sooner rather than later. Here’s how you do that.
First, talk to your lawyer about what you want. Will you be satisfied with compensation for your financial losses? Or do you also want compensation for non-economic damages, such as loss of enjoyment of life? If your lawyer is going to negotiate on your behalf, it is critical that you make your wishes abundantly clear.
Secondly, it is important that you, as the injured party, know how much your case is worth, and how much you are willing to accept. Your lawyer can explain how damages are calculated and help manage your expectations. With reasonable expectations of how much you stand to receive, you may find your attorney is able to reach a fair settlement fairly quickly.
Dealing with an insurance representative – either directly or indirectly – can be intimidating. Dealing with an attorney can be too, especially if you have never been involved in a lawsuit. But don’t be afraid to ask questions. If an insurance adjuster makes a low offer – either directly to you or through your attorney, don’t be afraid to ask why. As the injured party, you are entitled to an explanation, and you may find that rebutting their argument isn’t all that hard.
Lastly, there are times when it is not only ok to make emotional arguments, but it is also sound strategy. Suppose, for example that you are no longer able to travel or play with your children because of your injury. If so, submission of old family vacation photos may make your argument for loss of enjoyment of life more compelling. In the end, it may also help you get a fair settlement.
Formalizing a settlement
If your lawyer reaches a settlement that meets with your approval, he or she will make sure it is formalized. This just means it will be set forth in writing and presented for each party’s signature.
With a signed settlement agreement in place, you can seek legal recourse if the insurance company fails to fulfill its end of the bargain. However, you should be aware that a simple signed agreement does not carry the same weight as a consent agreement or stipulated order.
To obtain one of the latter, you or your personal injury attorney must present the settlement to a judge for approval. If he or she signs off on it, it effectively creates a formal order and ends your case. That’s why it’s important to reach consensus on all of the issues in question and leave no doubt about the settlement terms before finalizing the agreement.
Effect of settlement on a pre-settlement funding
If you received a lawsuit settlement funding, the funded amount plus any fees will be deducted from your settlement proceeds by your attorney. In most cases, this amount is deducted from the final settlement after your attorney’s fees and any other applicable fees or costs.
More often than not, the settlement is enough to cover the amount owed. This is because companies that provide lawsuit funding vet applications carefully. In fact, approval and the amount of the funding are both based on the strength of the applicant’s case.
That being stated, there are some circumstances in which the settlement amount does not cover all of the plaintiff’s obligations. Stipulations about what happens if the settlement amount does not cover the funding will be detailed in the funding agreement. Therefore, it is critical that you review the funding agreement with your lawyer before signing it.
You are not alone
If you were injured in an accident caused by someone else and you are facing financial difficulties, you are not alone. As long as you have a personal injury attorney and you are involved in ongoing litigation, we may be able to help. Call us to apply for or learn more about pre-settlement funding, today.
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Oasis provides pre-settlement funding, also known as consumer litigation funding, to its customers through different products depending on their state of residence or cause of action. Many consumers will be provided pre-settlement funding in the form of a purchase agreement, which assigns a portion of the pending proceeds from their legal claim. Other consumers, such as those in CO, IL, MN, MO, SC, WI and some OK residents, will be offered a funding in the form of a pre-settlement loan, sometimes referred to as a lawsuit loan. These transactions have important differences, therefore, consumers should carefully review and be aware of the type of transaction that is offered to them by any funding company