The Key Differences between Settlements and Judgements in Personal Injury Cases

A personal injury case arises when an individual suffers an injury or other losses due to someone else’s negligence. According to personal injury laws, negligence is the failure to act with the level of care that a reasonable individual would’ve exhibited under the same circumstances.

To prove negligence, the victim must prove the following elements, often known as the elements of personal injury law.

  1. Duty of care
  2. Breach of Duty of Care
  3. Causation
  4. Damages

The victim has to prove each element before moving on to the next. This is because each element relies on the other to coexist.

Proving the elements of personal injury law with help is possible. Victims need the assistance of a lawyer in all aspects of a personal injury case, from drafting a demand letter to acquiring compensation.

Whenever the topic of compensation arises, an obvious question arises: “Should I settle outside the court or file a lawsuit?”

It’s normal for victims to ask this question because each has its pros and cons. Read on to find out what they are.

What is an Out-of-Court Settlement?

As the name suggests, an out-of-court settlement is one where the victim agrees to compensation from the at-fault party’s insurance company. Statistics say that 96% of personal injury cases are settled outside court.

Out-of-court settlements are done through approaches known as alternate dispute resolution methods. Three of the most common dispute resolution methods include:

  • Negotiation
  • Mediation
  • Arbitration

In out-of-court settlements, the victim and their lawyer will meet the at-fault party and their representatives (usually an insurance adjuster) in a private location and discuss the case. The victim’s lawyer makes an initial offer, which the at-fault party can either.

  1. Accept
  2. Reject
  3. Make a counteroffer

If a counteroffer is made, the victim has the same three choices. This negotiation process goes back and forth until an agreeable settlement is reached.

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Advantages of an Out-of-Court Settlement

An out-of-court settlement presents the following advantages to the victim:

  • Speedy resolution
  • Increased privacy
  • Assured compensation
  • More negotiation power to the parties involved
  • Comparatively inexpensive

Disadvantages of an Out-of-Court Settlement

The benefits aside, an out-of-court settlement has some serious disadvantages.

  • The at-fault party pays their way out of punishment
  • Chances of being lowballed
  • The victim loses the right to sue the at-fault party in the future

Trial Judgments

A court trial arises only when out-of-court settlement negotiations fail. Both parties can initiate a court trial in a personal injury case. The parties may opt for a court trial if:

  • The victim feels the compensation offers are poor or unfair
  • The at-fault party’s insurance company doesn’t want to set an example by offering a high settlement
  • The victim feels that the at-fault party must be punished for their actions
  • The victim wants their case to set a precedent for similar cases in the future
  • The victim wants to publicize the injustice done to them

A court trial is often the last resort for victims in a personal injury case. It involves the following steps:

  1. The victim’s (plaintiff) lawyer files a complaint in court. The complaint contains all relevant facts about the case
  2. The complaint is served to the defendant (the at-fault party)
  3. The defendant responds to the complaint
  4. Discovery begins. In this stage, both parties will share the evidence they have to prepare for the court hearing
  5. At the hearing, both sides make their opening statements before the judge and jury
  6. Both sides present witnesses as proof. Cross-examination of witnesses is done as well
  7. Both sides make closing arguments
  8. The jury discusses the case in a separate room in the court
  9. The jury shares the verdict with the judge, who presents it to the court

Advantages of a Trial

Taking your case to court has the following advantages:

  • Chances of a better settlement
  • The liable party is awarded the punishment they deserve
  • The victim’s case is used as a precedent for future cases
  • Emotional relief that justice has been served

Disadvantages of a Trial

Sadly, the disadvantages of a trial outweigh the cons. They are mentioned below.

  • Expensive
  • It takes longer to resolve
  • Zero privacy
  • 50/50 outcome
  • Huge emotional toll

Final Verdict

Both settlements and judgments have their share of pros and cons. It’d be best to consult a lawyer and hear their opinion before choosing one. Here is a direct comparison between settlements and judgments.

  • Court trials are expensive, while out-of-court negotiations are not
  • Out-of-court negotiations have assured payouts; court trials do not
  • Out-of-court negotiations offer better privacy
  • The at-fault party is let off the hook in an out-of-court settlement, which is not the case in a court trial.
  • The victim can claim punitive damages in a court trial

In addition to these tips, a lawyer will be a vital addition, regardless of an out-of-court negotiation or court trial. Their guidance will distinguish between a successful compensation claim and going home empty-handed.