Every successful personal injury case ends up with payment of money to the injured person. Because of this, clients and prospective clients, will often ask lawyers to estimate how much money they might receive if the case is a success.
Lawyers are in a better position than most to give estimates. In many cases your local lawyer will have a career of experience with other cases, will be keeping up with jury verdicts in your jurisdiction, and will be caught up on the latest developments and trends in the Law. Of course, the lawyers estimate will be least accurate at the beginning of the case and will progressively become more accurate as the case develops, ultimately being 100% accurate when the case ends by settlement or verdict.
Most people understand that certain types of injuries result in larger settlements – clearly broken bones are “worth” more than, for example, “whiplash” type injuries. Your lawyer will know how much more – for example, in my jurisdiction, a broken arm is usually around $75,000, while basic whiplash from an auto case is normally in the $5,000 range.
Most people understand that certain types of injuries result in larger settlements.
Those estimates assume that the injury was caused by negligence of the Defendant and not on purpose. If the Defendant acted with intent to harm you, judges and juries can and will commonly award “punitive” or “exemplary” damages – requiring the Defendant that acted with intent to pay more than a Defendant who simply made a mistake. The Defendant’s intent may or may not be obvious at the beginning of the case, but finding out later in the case that the Defendant intended to cause the harm would certainly increase the lawyer’s settlement demand.
Many, many factors can affect the “value” of your case, and, ultimately how much money you will get. Few of these factors are known at the beginning of the case and many of them can drastically influence how much money your case is actually worth – because of this quick settlement of a case is rarely the best idea. The rest of this paper is a discussion of some very serious factors you and your lawyer should consider together before settling your case.
1 In Pennsylvania, if a driver elected “limited tort” coverage when thy bought their own auto insurance whiplash type injuries may, in fact, have no value at all – watch for a later paper on Tort Options in PA.
2 I am admitted to practice in Pennsylvania and New Jersey. My main office is in Pittsburgh, PA. My practice PA state wide.
3 Interestingly punitive damages are not covered by insurance policies. Insurance protects people from accidents, not things they intended.
Willing Buyer and Seller
In a sense, settlement of a case is a “sale.” You are selling your right to sue the Defendant in exchange for money. Like any other sale, fair market value of a case is whatever price you are willing to accept and the Defendant is willing to pay. Your lawyer will advise you on value, but the case, and the decision of what to accept as a settlement, are yours.
Few Americans have enough liquidity to pay any significant settlement on their own. Saving has been out of fashion for decades and in fact most Americans are technically insolvent which means they already owed creditors more than they could pay before they injured you. For this reason, the vast majority of injury settlements are negotiated with and paid by the Defendant’s insurer. If the Defendant has no insurance or minimal insurance, there may be little or nothing to recover from him, no matter how severe your injuries may be.
As a default, Pennsylvania auto insurance policies have coverage payable to the policy holder if that policy holder is injured in an auto accident where the other driver does not have insurance at all or does not have enough insurance to fully compensate the policy holder. This is called Uninsured Motorist Coverage and Underinsured Motorist Coverage and it must be in the same amount as the liability limits of the policy unless a different amount (which could be zero) is chosen by the driver when buying his policy on a specific form and signed off on by the driver.
That is probably quite confusing, but you should be aware that all may not be lost if the other driver has minimal or no coverage. One very important component of investigating any case involves investigating all insurance coverage available.
Competent, Knowledgeable Review of Medical Treatment and Records
Your own statements about your injuries, pain and suffering are evidence, but understandably are taken with a grain of salt by the Defendant and his or her insurer. Intentionally or subconsciously most people will overstate their claim of injury when that overstatement will result in more money being paid to them. Because of this the Defendant’s insurer or attorney will commonly ask your lawyer to prove your injuries by submitting medical records that contain the diagnoses, impressions, and treatment made by the presumably unbiased health providers that you visited to treat for your injuries.
This is quite a sticky point, but I have always believed that lawyers should get help in reviewing the medical records that they are sending to an insurance company to prove injuries. Lawyers are not trained to read medicals and if they don’t get help in understanding your treatment records, they won’t be able to effectively use that very important evidence to advocate for the best possible settlement of your claim.
Because they could not and did not actually read or comprehend the medical records they were sending to substantiate their clients’ claims to compensation, lawyers in the past used a certain formula, multiplying the total cost of your medical treatment by a factor to come up with a rough estimation of what a case ought to settle for. I have heard numbers ranging from three to eleven times medical bills. I strongly disagree with the use of this methodology as horribly inaccurate compared to settlement demands based on an informed understanding of the medical records. An extreme example that comes to mind is a case where someone loses their arm –there would not be much in medicals, but the case should be settled for quite a large sum. At the other end of the extreme spectrum would be the case where the client undergoes a lot of expensive testing which determines that he or she has not been injured.
In reality, the value of a competent and knowledgeable review of the medical records in making settlement demands is more nuanced than my extreme examples. Much smaller details can get missed and cost the client settlement money, for example, was the client prescribed ibuprofen for his pain, or an opioid? Certainly pain that requires treatment with high-powered and addictive opioid painkillers should demand more money in settlement than pain that you can control with over the counter painkillers. Small details of this type can drastically effect settlement value of the case but the lawyer is going to have to understand the medical records.
No knowledgeable and competent review of the medical records is of value unless it is a knowledgeable and competent review of all of the medical records, which means that the collecting and reviewing your medical records happens after you have finished treating for the injuries you sustained. At the end of your treatment you will either be restored to 100% of your pre-injury condition or you will not. Clearly, injuries that are of a permanent nature would indicate that your case has a larger settlement value, and it isn’t always obvious whether the medical profession will be able to completely “cure” someone of their injuries so settlement negotiations should never begin until after the client has completely finished treating for his or her injuries.
Criminal or Reckless Conduct of the Defendant
As noted above, most injury cases arise out of the negligence of the defendant: simply put, the defendant did not intend the harm, but failed to use reasonable caution to protect against causing harm. I also noted that a Defendant who harms you on purpose will ultimately end up paying much more than someone who causes the same injury negligently.
What about a situation somewhere in between negligent and intentional? What is the result, for example where the defendant who rear ended you is legally intoxicated or high? What if the Defendant who rear ended you was perfectly sober but was going 100 miles per hour in a 15 mile per hour zone?
1In fact, the defendant who harms another person intentionally is almost certainly guilty of one or more criminal acts.
Negligence is the failure to use reasonable care for the protection of others, so to speak, negligence involves disregarding or failing to grasp the possibility that your actions or failure to act created a possibility that someone might get hurt. Recklessness is a species of “super negligence” and involves the probability that your actions or failure to act created a possibility that someone might get hurt.
Where a Defendant harms you through recklessness or while violating a specific criminal law that was enacted to protect you from the type of harm that you ultimately suffered, that defendant is subject to the imposition of punitive damages and, in much the same way as someone who intentionally harms you, will ultimately end up paying more money to settle with you than someone who caused the exact same injuries negligently.
Of course this is not an exhaustive list of factors that affect how much money any individual personal injury case might settle for, rather, this is intended to give insight on valuation factors that laymen and even some lawyers overlook when estimating case values for clients and in making settlement demands upon defendants.
Importantly, I hope that the reader takes away an understanding that while the liability to pay compensation is completely determined at the instant of the injury-causing incident, the dollar amount of that liability cannot be completely determined at that moment or without a thorough and careful review of applicable insurance policies, medical records, prognosis for recovery at the end of treatment, as well as whether the Defendant is liable for punitive or exemplary damages.
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Joseph P. Murphy, Senior Attorney
J. Murphy Firm