Settlements In Texas Personal Injury Cases
Clients sometimes ask me if a certain expense will be included in their settlement. I always respond by explaining that settlements are not itemized statements. A settlement is a lump sum that is tendered by the insurance company to purchase peace – in other words, to insure that all possible claims against the insured that may arise from the incident in question are closed forever. The adjuster does not itemize the expenses she is allowing or including in the settlement figure. This would require extra work that is not necessary. This article will explain how the settlement process works and how settlements differ from judgments.
HOW A SETTLEMENT IS NEGOTIATED
To reach a settlement with an adjuster is to reach an agreement on the value of the case. This is not a true value, as only a judge or jury can tell you what the true value of your case is. Instead, it is what we call “settlement value” – that is, an amount that the adjuster is willing to pay and the Plaintiff is willing to accept, in order to avoid a jury trial. In order to do this, however, both parties have to have some idea of how much a jury might award. But how can your attorney and the adjuster know the value of your case? They rely on experience and on data that is available concerning similar facts and injuries.
Experience has taught those of us who are in this business that there are many factors that drive value. First, consider the facts that led to Plaintiff’s injury. Were the defendant’s actions egregious, such as drunk-driving, street racing, or reckless driving? Was the Plaintiff absolutely and totally blameless? Or partly to blame? Is the mechanism of injury easy for a jury to understand? A jury can easily understand how a terrible car wreck can cause injury, but not too easily understand injury that is claimed from a minor impact.
The next consideration is the types of injuries alleged by the Plaintiff. Are the injuries easy to prove and ones that most people would associate with pain? For example, broken bones (which can be graphically displayed with x-ray film) and surgeries can evoke pain and discomfort much easier than a strained neck or back.
The next consideration is the economic damages. These are the damages that can be reduced to dollar amounts in the form of billing records, tax returns, and receipts. This includes medical expenses, (past and future), receipts for medical equipment, lost income, and future loss of wage earning capacity.
Next come the non-economic damages – those that cannot be proved through bills and receipts, such as pain, suffering, impairment, and disfigurement. Will the jury be moved to pay a lot of money for pain and suffering? This depends of the degree of injuries. For example, a Plaintiff who was hospitalized for a long period of time and who was not able to use an arm or leg for a long time will prove more pain and suffering than one who was only seen in the emergency room and had only chiropractic care or physical therapy. If there is a claim for disfigurement, it makes a difference as to what was disfigured – a prominent location on the body, such as the face, or a body part that is typically covered by clothing or footwear? All these are important factors to consider in evaluating value.
Finally, the character of the parties must be considered. Are the plaintiff and defendant easy to like? Or will one of them come across on the witness stand as a liar, exaggerator, smart aleck, or jerk? Was the defendant kind and respectful at the scene, or was he rude or combative? The parties’ deposition provide a good preview of how a jury will assess likability. Sometimes, the facts themselves provide a glimpse into the parties’ character. Such as when the incident occurred when Plaintiff was on her way to midnight mass while the defendant, an unemployed ne ‘r-do-well, was coming home from a bar with a feint smell of alcohol on his breath. These are distinctions that affect the jury’s award.
Your attorney should send a demand letter to the adjuster highlighting all the reasons why he/she thinks a jury will return a certain verdict. The adjuster will consider this letter but will also consider what juries in that jurisdiction have been awarding in similar cases with similar injuries. How do they know what other juries have done? This information is found in publications called Blue Sheets or Verdict Search, which summarize case facts and jury awards or settlement amounts from every county in the state.
THE ADJUSTER STILL HAS TO ACCOUNT FOR ALL THE ELEMENTS OF DAMAGES
Just because the adjuster’s offer is reflected in one lump sum doesn’t mean she won’t explain how she arrived at that sum. I frequently ask the adjuster to review the medical bills and other expenses with me. Sometimes, they are missing some bills or wage information and they will adjust their offer upward when this is pointed out. Sometimes I can convince her that she is under-valuing what the jury may return for pain and suffering or for impairment damages. In any case, the adjuster should have no problem itemizing the damages to your attorney so that your attorney can make sure all damages have been accounted for.
SHOULD YOU TAKE THE OFFER OR GO TO TRIAL?
In my entire career as a Houston personal injury attorney, I have never forced, coerced, or browbeat a client into accepting an offer of settlement. It is always my client’s decision. However, it is my role to make sure the client makes the right decision. Toward that end, I do something that few attorneys take time to do – I discuss my client’s options at length, no matter how much time or how many meetings it takes. As long as my client has questions, or as long as I’m feeling the client is still not fully informed, we keep talking.
Clients often have a certain figure in their head as to what their case is worth. Often, this figure has no basis in any fact but is a number the client has just thought of as a “good settlement”. Other times, they arrived at such number after listening to friends and family or after hearing about a case on television or reading about one in the newspaper. I remind them that friends and family have no expertise in what juries are doing and that other cases may have some strikingly different facts that explain why a jury was so generous.
To make an informed decision, the client needs to understand what a jury trial will be like, what the court will allow into evidence, and how an average jury might calculate the damages on the verdict sheet. It involves similar research as one would expect to engage in when purchasing a car. I often go through an exercise of preparing a jury verdict sheet and asking the client for reasonable numbers they would put in for the various elements of damages if they were judging a similar case. Surprisingly, they tend to come up with very conservative numbers.
Remember, a jury is not there to make either party happy – it is there to review the evidence and render a verdict that best fits the evidence. I frequently have to remind clients that they will not be able to tell the jury how much money they need or how much money they want. I remind them that their wishes or desires are not relevant and will never be heard by a jury. Sometimes, clients have their hearts set on buying a new car, getting a new roof on their house, or buying some luxury item with the money they get from their case. Again, I remind them this is not how it works. The jury will only hear the evidence the court will allow and needing a new roof on your house is not evidence in a car wreck case.
Sometimes, the client wants a lot more money than the adjuster is willing to offer because of “what could have happened”. This is the “I could have been killed” argument. Again, a trial is not about what could have happened, but what actually did happen. Finally, if the client has a hard time coming off of his expectations, I ask him how much research he has done. I know he has never tried a case before, but has he at least gone down to the courthouse to observe a trial from start to finish? Has he looked at the blue sheets? Has he researched what types of damages will be on the verdict sheet in his trial? Has he reached out to a friend who has knowledge of what juries are doing with similar cases? Not surprisingly, I have yet to have a client tell me he has done any research.
DIFFERENCES BETWEEN SETTLEMENTS AND JUDGMENTS
A settlement can be reached between the parties at any time prior to a judgment. For it to be binding on the parties, the agreement is put into a written instrument called a Release, and the Plaintiff’s acceptance of it must be evidenced by his or her signature. Once the Release is signed the case is closed and there can be no appeal.
By contrast, a judgment can be, and frequently is, appealed. This is because a judgment is a decision handed down by either a judge or a jury and does not reflect an agreement between the parties. Once appealed, it can take years for the parties to know their fate. However, even when a case is appealed, the parties are free, up until just before the last court has ruled, to negotiate a settlement that closes the case and makes the judgment obsolete.
With the knowledge you have learned from this article, hopefully, you will be able to sit down with your attorney and make an informed decision about whether to accept the settlement offer or try your luck with a jury. I have found that once the client fully understands the process, they almost always make the right decision. Good luck.
Law Offices of Robert Rodriguez