How Do Lawyers Negotiate Settlements?

Friday, April 21, 2023

How Do Lawyers Negotiate Settlements?

Written by Malman Law, reviewed by Steve J. Malman.

Negotiating a settlement is one of the most important skills for your personal injury lawyer to have. Dealing with a personal injury can be both physically and emotionally challenging. The medical expense of an injury can easily add additional weight to this already difficult time. The constant influx of hospital bills arriving every day while you are trying to focus on your recovery is a stressful distraction.

Many people who have suffered an injury are also unable to work, so facing lost wages on top of additional expenses makes the situation even more overwhelming. On top of all of this, the insurance companies will work to minimize the payout for your claim.

For this reason, it is advisable to work with an experienced attorney who will handle the communication with the insurance companies or the other party so that you don’t have to.

A skilled personal injury attorney in Chicago will advocate on your behalf and work to negotiate a settlement for your claim.

Putting Together a Settlement Negotiation

There are many factors that go into negotiating a settlement, and an experienced attorney will have a process that works well for them. If your attorney is managing the negotiation process, information is key. The more evidence and detail that you can provide, the stronger their position will be to negotiate on your behalf.

Throughout the entire process, attorneys will look for documentation such as accident reports, doctor’s notes, and other evidence that they can use to support their claim and to negotiate the highest possible settlement.

Some of the steps that an attorney will consider when putting together their approach to negotiation include:

• Determining who is at fault – The first step is to review who is liable for the accident. In most cases, the party that is at fault will be liable to pay for damages that resulted from the accident. There are several ways that a party can be found at fault for an accident. One of the most critical pieces of information that an insurance company will rely on in the case of a motor vehicle accident is the police report. Other evidence collected at the scene of an accident or other documentation, such as medical reports, can also help.
• Determining the damages – Seeking both economic and non-economic damages is common when it comes to an insurance claim. Economic damages include concrete expenses that are easy to calculate, such as lost wages, medical devices and equipment, medical bills, and more. Non-economic damages are harder to calculate and are more common with catastrophic injuries. These include pain and suffering, loss of companionship, damage to a reputation, emotional distress, and more.
• Medical bills and other expenses – While medical bills are often categorized as economic damages, injury lawyers will take a close look at these when working to negotiate a settlement. There may be additional fees and other expenses that have not previously been accounted for. Lost wages due to time off work is another point of negotiating a settlement.
• Insurance policy limits – Insurance policies all have limits on the amount that they will pay out for a claim. These limits vary from policy to policy, but there are times when the cost of injuries is greater than the liable party’s insurance policy will cover. Every state has minimum liability insurance coverage requirements for insured drivers. The most common liability insurance requires that a driver maintains coverage up to $25,000 per person, meaning that the insurance company would need to pay a maximum of $25,000 to the injured party.

How Long Does it Take to Negotiate a Settlement?

After your attorney has taken a close look at all the evidence and has put together a negotiation strategy, the next step will be to begin the process of negotiating directly with the insurance company. Typically, this will start with your attorney sending a demand letter to the insurance company for a specific amount. Often this amount will be the maximum policy limit, but this varies from case to case.

Once the insurance company receives the demand letter, their team will review and respond with either an agreement or a lower settlement amount. It is common for an insurance company to offer a counteroffer to the initial settlement amount, although they are not required to do this.

Insurance companies are looking to maximize their profits and will attempt to find ways to minimize or dismiss your settlement request. This is one of the reasons that it is beneficial to work with a lawyer who is experienced in negotiation. If the insurance company offers an amount that is lower than your initial request, the settlement will go into a negotiation process.

Although it is not common, in some situations, an insurance company will refuse to negotiate. In this instance, your attorney will advise if it is in your best interest to go to trial in order to reach a settlement agreement.

The entire process, from the start of your case through the settlement, can take several months to complete. In some instances, especially if your case goes to trial, it could take even longer. It can be difficult to be patient during the negotiation process, especially if you are facing financial challenges such as lost wages and expensive medical bills.

Your attorney will keep you informed throughout the process and will do their best to reach a maximum settlement amount as quickly as possible. They are working on your behalf and advocating for just compensation to help in the event of your accident.

Talk with a Skilled Chicago Personal Injury Attorney Right Away

If you have been in an accident or suffered an injury and believe that another party is at fault, it is advisable to speak with an experienced lawyer as soon as you can.

At Malman Law, our team is dedicated to helping our clients, and we understand how frustrating and painful the aftermath of an injury can be. We also know it can be difficult to choose the right legal representation, so your first meeting with us is free, and there is zero obligation. Contact us today to schedule an appointment and see how we can help.