Why Are Most Personal Injury Cases Settled Out of Court?

The vast majority of personal injury cases in the United States - up to 95%, according to some studies - are negotiated and settled out of court without ever going to trial.

Every case is unique, and an experienced and qualified personal injury lawyer should be willing and able to litigate a case in court if necessary, because sometimes negotiations do break down. But in fact, injured persons often receive higher compensation in less time in pre-trial settlements than is typical for cases that go to trial.

This is especially true when considering that the injured party does not always win at trial - going to court carries the risk of losing the case and receiving no compensation at all.

Both Sides Are Motivated to Settle the Case

In a typical personal injury case, both parties to the accident would prefer to avoid the uncertainty of a trial.

The injured party may be financially motivated to finalize a settlement quickly, while the party accused of negligence is often particularly motivated to settle out of court in order to avoid negative publicity or the admission of liability. This is particularly common in cases where the defendant is a corporation, a government agency or a prominent individual.

Both Parties are Accustomed to Settling Out of Court

Since most personal injury cases are in fact settled without going to trial, professionals who represent parties to accident cases participate in settlements regularly. Insurance companies have extensive experience and tools at their disposal to help them put a value on an injury case, and a seasoned accident attorney is similarly equipped to formulate an appropriate settlement amount.

When both sides of a case are good at sizing up its value, it may only require a little bit of negotiation to arrive at an amount that is both reasonable and mutually agreeable, so a good injury attorney whose interests are aligned with the client’s interests will always try to negotiate a reasonable settlement first.

The Benefits of Settling Your Injury Case Out of Court

You Get Your Money Faster

It is not at all unusual for a personal injury case that goes to trial to take several months or a year or more to be resolved, and the defendant’s insurance company is seldom motivated to expedite matters once they get to court. Although the trial itself might take just a couple of weeks, discovery, mediation and scheduling are just a few of the factors that typically result in a process that takes much longer.

On the other hand, a pre-trial settlement in an injury accident case can often be successfully negotiated and finalized with the insurer in just a few weeks. Settling your personal injury case out of court is nearly always the fastest way to get the compensation you're entitled to after you've been hurt in an accident due to another driver's negligence.  

It Costs You Less

Personal injury attorneys typically only collect a fee if and when you receive financial compensation in the form of an insurance settlement or a court judgement. Although fee structures vary, a common arrangement is for a law firm to collect about a third of a pre-trial insurance settlement.

But the fee is generally bumped up closer to 40% if your award is the result of a trial. So if your lawyer is able to settle your case out of court, you'll usually keep a larger percentage of your total compensation. That’s actually not the whole story, though - a trial also comes with expenses, and these will generally be paid out of your award as well.

None of this means that your attorney shouldn’t go to trial if the insurance company won’t agree to a reasonable settlement, and the fees described above are absolutely reasonable and typical. But avoiding trial does typically reduce your attorney fees and expenses.

Your lawyer should inform you in detail and discuss with you all of the specific fees and charges that may potentially be associated with your case before you agree to representation. Make sure fees are covered thoroughly in your initial consultation with an accident attorney.

You Eliminate the Risk of Losing

If your personal injury case goes to trial, there is no guarantee that you will win an award at all. And if the jury decides in your favor, your award could still be smaller than the amount you might have settled on before trial.

You Can Preserve Your Privacy

All the details of a trial, including any evidence or testimony presented by you, the defendant, your attorneys, or any other witnesses, and any compensation awarded, will normally become matters of public record that can be accessed by anyone, now or in the future, including:

  • Current and potential employers
  • Current, former or potential spouses or partners
  • Family & Friends

A pre-trial settlement, on the other hand, will allow you to keep all of that information private. The party accused of negligence in a settlement will often require a non-disclosure clause in order to protect themselves from public scrutiny, and the injured party can make the same stipulation.

Will Your Personal Injury Case Go to Trial?

Despite the substantial advantages of a pre-trial settlement, a competent and experienced personal injury lawyer will always keep the option of going to trial on the table. Litigation can be the right decision if the insurance company simply refuses to settle, or if the insurer’s final offer is just too low.

Your attorney should discuss with you in detail the benefits and potential risks of taking your case to trial, and allow you to make an educated final decision.