I am an auto accident attorney and personal injury attorney in Pittsburgh, but I handle cases all over Pennsylvania. My firm offers free consultations and free legal advice. I accept limited tort cases and have had some good successes getting people out of limited tort.
I was recently interviewed about the personal injury business and the interviewer asked me what I thought was the biggest change or challenge facing the personal injury business. I pointed out that life has become very busy and people simply don’t have the time to take half a day off and drive into the city to meet with a lawyer.
In many cases, people are so time strapped that they will fail to pursue a valuable and legitimate personal injury claim rather than deal with the hassle of hiring a lawyer, let alone the hassle of dealing with one.
We have noticed that, because of this, a certain portion of people will try and represent themselves in an injury case. Of course, we advise against that, but if you insist on representing yourself, I have compiled a list of ten mistakes that people commonly make.
Before we get started, if you are settling a case yourself it means you are going to be dealing with an insurance adjuster. That adjuster is going to be evaluating your ability to present yourself and your claim as a factor in how much they will pay to settle the claim.
The adjuster will be assessing, among other things, their litigation risk – how likely is it that this matter is going to court if they don’t settle. When someone represents themselves, it does not mean that the litigation risk is automatically zero because for all they know you are an attorney, or even another adjuster, settling their own case.
Another thing the adjuster will be doing is setting and adjusting reserves for payment of the claim. Click here for a link to my article on reserves.
Your ability to avoid these mistakes can make a large difference in how much your case settles for, or even if they will settle at all.
1. Misuse of jargon
The personal injury industry, like any industry, has its own “jargon.” If you don’t know it, or don’t understand it, the adjuster will know that you don’t know what you are doing and they will adjust the reserve and ultimate settlement of your claim accordingly. There are hundreds of common personal industry terms such as “PIP,” “BI,” Tort option,” “UM/UIM,” “Intercompany Arbitration,” ”Loss reserve,” and the like. If you don’t know these terms it will show, and it will negatively affect your prospects for settlement at full value. That being said, you should read up on lawsuit settlement terminology.
2. Trying to relate to similar cases
How much money are you going to demand in order to settle your claim? How would you come up with that number? Maybe you know someone that had a similar case, and you think that you can just demand the same amount.
This is foolish thinking.
Even assuming that the other person told you the truth about how much they got, everyone knows that no two claims are the same – all the adjuster has to do is show you how your claim is different and you have no basis for what you are asking for. Refuse to give information about how you came up with your demand amount.
3. Attempting to save on attorney fees
Who cares if you get less, you won’t have to pay attorney fees, right? You may have a case that is worth $10,000, but if an attorney handles it, they will take 40 percent and you will only get $6,000. So you can settle it for $7,000 and come out ahead, right?
Think again, because the adjuster on the other side of this has done the same thing. Once they figured out that you aren’t going to have to pay attorney’s fees, in their mind, they lowered the amount they have to pay you.
In the above scenario, you would be starting at $6,000 and working down off that number. If your sole motivation in representing yourself is to save fees, a better place to start might be to simply ask. Many attorneys will negotiate a lower fee for settled cases if you ask, so ask.
4. Not understanding valuation
A lot of people simply demand crazy numbers coming out of the gate and think that this will give them room to negotiate. It won’t.
Making an unrealistically high demand for settlement simply marks you as a non-professional who doesn’t know what you are doing. Sure, a case with similar injuries and different facts may have settled for a lot more, but the average person has no idea of how those factors relate.
Even a case with the exact same injuries will settle for more if the injuries are caused by a drunk driver, or on purpose, right? Maybe, maybe not. It is possible that if you stand on the fact that the driver did it on purpose, the insurer will deny coverage outright, as insurance only covers negligent acts and does not cover intentional acts.
5. Trying to rush to settle
Everybody knows that good things come to those who wait. In my blog, I discuss at length the risks of settling too quickly.
You should understand that adjusters work normal business hours – the same business hours that you likely work. Getting an adjuster on the phone is hard enough for lawyers who do it for a living, it is going to be a real hassle for you. Plan for time to chase the adjuster down.
6. Adverse info in medical records
One of the main factors in case valuation is the nature of the medical treatment and medicines that were required to rehabilitate the injured party. This information is commonly found in medical records. Unfortunately, the medical records may have all manner of things in them that you would rather the other side not know about, for example similar prior injuries, drug habits or drug treatment records, etc.
Medical records also commonly contain duplicates of the same record or sheets that have no information that is valuable to the settlement process. You may wish to have a medical secretary or other expert in working with medical records go over your records and explain what they say before you use them to prove an injury.
7. Poor communication
In the part above about the rush to settle, I spoke briefly about how the difficulty of getting the adjuster on the phone when you are working normal hours can wear you down to the point that you will take a settlement just to get the process over with.
There are other factors that will also negatively affect the settlement negotiation process, for example. Is there a baby crying or a dog barking in the background when you speak? Do you have the ability to easily send and receive faxes? Are you comfortable giving your social security number to the adjuster (they will need it to issue a check to you)?
These subtle interruptions will work the same magic – in favor of the adjuster.
Plan for quiet communications time where you can concentrate on what you are saying and what is being said back.
8. Letting pride get in the way
You may have always wanted to be a lawyer. Maybe people in your family told you that you should be a lawyer because you always seem to “win” family arguments. Or, maybe you HATE lawyers, and can’t stand the thought of having to deal with one. Or maybe you just want the “thrill” of being able to brag about settling your case without a lawyer.
These people are all selling themselves nonsense.
If you were sick, would you diagnose and treat yourself because you always wanted to be a doctor? If family members told you that you should have been a doctor, does that mean you should operate on yourself?
Plenty of people hate doctors, but guess where they go when they need medicine? Sure, you can’t get medicine without a doctor’s prescription, but honestly, would you if you could? Certainly not, you might kill yourself with an incorrect dose, improper medicine, or even a drug interaction.
Those bragging rights you are dreaming of – blah – we both know you will be lying when you talk about what happened while you settled your own case and how cool and tough you were. Hire a lawyer, get all the money a professional can get for you, and just tell people that you did it on your own, you can still tell tall tales about how you settled it yourself, and they will still be lies, but you will get the money easier.
9. Subrogation, Negotiation, and Litigation
If you suffered an injury, you likely paid for your medical treatment using your insurance coverage. Almost all private insurance plans reserve a right of subrogation – when you recover money for your injuries, they are entitled to recover what they paid for your medical care, out of your settlement. The insurer has a subrogation lien on your settlement proceeds
Most people are unaware that they have a contractual duty to protect the subrogation rights of their health insurance company, and either don’t know about the subrogation rights of their insurer or choose to ignore them to get more money. Even fewer people are aware of how to negotiate the settlement of a subrogation lien or how to legally avoid it altogether.
Your insurer will likely find out about your settlement, as they have their ways. When they do, they will likely send a letter requesting you reimburse them for the costs of your treatment. When you don’t have the money, or have already spent it, you may find yourself pulled into a lawsuit.
Even worse, if you received government funded medical care to recover from your injuries, the subrogation is statutory, meaning it is an automatic lien on your property, bank accounts, and the like.
Few people will try and settle a case that is big enough for subrogation to be a serious matter on their own, but it is a consideration that can come up faster and harder than you might think. Medical prices have been skyrocketing for years and the average case equals or exceeds the total amount of any settlement you or your lawyers might negotiate.
My advice: If you used your medical insurance to pay for any significant part of your treatment, seek counsel.
10. Taxation without representation
As a general matter, the proceeds of a personal injury case are not taxable.
The legal theory is that you are recovering for something you loss, not earning income. But what about where part of the settlement is for lost wages?
If you had worked and earned those wages, you would’ve had to pay income taxes on those wages, meaning you will have to report and pay taxes on settlement proceeds earmarked as lost wages.
This is just one example of some of the tricky tax angles you can get into when dealing with settlement of a personal injury case. Even if they know that taxes are due, most people wouldn’t know how to figure them out or report them. If you are recovering lost wages or lost future earnings, at least consult with an accountant.
That’s all the advice I have to offer on the matter, listen to these tips and do your research if you chose to represent yourself in a case. If, after reading these tips, you have decided that you would prefer a lawyer, my team gives free consultations and legal advice. Just click the link here to contact us.