Settlement

Answers to most frequently asked questions about settlement.

1. What is a settlement?

Answer: A settlement is an out of court agreement to end all claims between the parties. A settlement almost always involves the defendant or the defendant’s insurance company paying money damages to the plaintiff.

2. What percentage of cases settle?

Answer: In excess of 90% of the civil cases in state courts settle and well in excess of 95% of civil cases in federal court settle.

3. What is a “confidential” settlement?

Answer: In some cases, the defendant will require that the terms of the settlement be confidential. This means that no one can discuss the amount of the settlement, and there will be penalties for a violation of the confidentiality agreement. Some defendants also require that there be no exchange of information discovered in the lawsuit and any confidentiality provision must be closely scrutinized to make sure it is clear and fair.

4. Can an attorney settle a case without the client’s permission?

Answer: No. The client or plaintiff is the only one with the final authority to settle a case.

5. Can a case be settled on behalf of a minor?

Answer: Yes. Whenever a case involves a minor, the parents act as the guardian or trustee of the funds in a settlement. Any settlement for a minor requires Court approval and funds can only be used for specific purposes and for the minor’s benefit.

6. Why do some cases settle for more than others?

Answer: An analysis of the fair value of a settlement is very complex and involves a number of issues:

A. Is liability clear? In other words, is one person at fault in the collision or could it be argued that both people were at fault in the collision.

B. The economic damages – will the plaintiff have lost earnings, lost earning capacity, and future medical bills.

C. The non-economic damages – what is the plaintiff’s disability or impairment. Another way to describe disability or impairment are the “can’t do’s”—what is it that the client can’t do that he or she could do prior to the collision or injury.

D. An analysis of the Jury Verdict Reporter. In Colorado, attorneys can obtain every jury verdict in the State of Colorado. It can be helpful to evaluate what other juries have awarded Plaintiffs under similar circumstances.

E. The liability limits of the defendant. A case may be worth $200,000.00, but if the defendant only has $100,000.00 in coverage, then the settlement can be dictated by the amount of coverage available.

F. There are numerous issues involved in a settlement, but the general rule is a thorough evaluation of the key issues on liability and damages. The more thoroughly and persuasively a case is presented will impact the settlement value of a case.

7. What is a structured settlement?

Answer: A structured settlement is similar to an annuity that will pay funds over time. The time period can be several years or over a lifetime. Structured settlements may be a good idea when settling a case for a minor, a person with brain injury/competency issues, or in the event of a very large settlement where it is anticipated that there will be long term financial needs. The final decision to accept a lump sum or structured settlement rests with the client.