Should You Settle or File a Lawsuit
Miller & Zois are Maryland injury lawyers handling auto accident, truck accident, medical malpractice, and product liability cases for serious injury victims. The majority of our auto accident, truck accident and medical malpractice cases are in Maryland in the Baltimore-Washington D.C. area.
There are two pitfalls for an accident lawyer when trying to settle a case without a lawsuit. The first has to do with wasting the client’s time. For example, where liability is questionable (as it generally is in slip/fall cases) you might find yourself demanding $25,000 for a soft-tissue injury sustained in a daylight slip and fall. Unless you are careful, you can easily spend six months to a year corresponding with adjusters who constantly request miscellaneous information from you with promises of settlement. Finally, after all of your letters and all your compliance, the adjuster ultimately responds to you with a firm offer of $6,500. In this hypothetical, twelve to eighteen months may have passed and the case has earned you nothing but headaches from your irate client’s telephone calls.
How to avoid this? The trick is to never fall into the trap in the first place. As discussed earlier, you and the adjuster should have established contact shortly after you provided notice of representation. If you had done your share, you would have provided the carrier with basic loss information, as well as periodic updates of your client’s condition, which would have enabled the adjuster to maintain an appropriate loss reserve.
The submission of your demand package should culminate this exchange of information and place the matter in a procedural posture appropriate for settlement. Whereas your settlement demand will have a limited life span, you have effectively framed a time period within which negotiations should transpire. If the adjuster in good faith requires additional information, he will be sure to ask for it, and you, of course, will timely respond. Every effort should be made at this point to settle, and if your relatively simple case cannot be resolved within a reasonable time period, file your complaint. I generally give the adjuster a ninety-day period within which to resolve the claim after making a settlement demand. At the expiration of ninety days, I file the suit. We’re going to trial (or at least taking the next step which is a lawsuit).
The second and far more important problem with trying to settle a case before filing a complaint concerns your own exposure to malpractice liability. For example, the accident lawyer’s client was stopped for a red light when he was struck form behind by another vehicle. He incurred medical expenses exceeding $45,000, required extensive surgery, and suffered lost wages and loss of earning capacity. Thirteen months after the accident, the insurance carrier for the defendant driver calls you and informs you that the bad guy had a $50,000 policy limit and will be happy to offer you the full amount. You accept, execute releases, and close your file. Good result for you and the client, right? Well, lets see. You have settled a claim with permanency and economic damages well in excess of the policy for $50,000. Did your client have UIM coverage that would have provided more of a recovery? How do you know for sure that the only coverage was the one $50,000 policy?
Unless you know for sure what caused the defendant driver to strike your client’s car, you have not done your job properly. Discovery may reveal that the defendant driver was drunk, and only got in his car after being helped off his barstool by the local tavern owner after he started to fall just as he finished his eighth martini. You missed a co-defendant (in states that allow dram shop liability) and one that most likely has either assets or insurance coverage. What if the crash happened because the defendant, a high priced defense attorney at a big law firm, was talking to a client on his firm-issued cell phone? Or if the defendant was a sales representative for a multi-national pharmaceutical company who just happened to be using his personal vehicle on a sales call? If your client discovers any of this after executing a general release and allowing limitations to pass, you have messed up big time.
Unless an accident lawyer is convinced that the file contains ALL of the information you need not only to negotiate settlement, but also to substantiate your recommendation to settle, wisdom dictates that you should pursue settlement well in advance of trial, but only after conducting detailed pre-suit discovery.
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