In the personal injury world, most of the cases settle prior to getting all the way to a jury trial. The reasoning for an injured to settle their case prior to taking it to trial can be a multitude of reasons. Some of these reasons include: avoiding the risk and uncertainty of trial and taking a sum certain to avoid the risk of walking away with less than the settlement amount or nothing at all. Another reason I hear from clients is that they just get so fatigued with the litigation process. For better or worse, the clients just get bogged down with the adversarial process that can last years. However, a lot of times, the injured takes the settlement because they believe the amount being offered is fair after consulting with their attorney.
For whatever reason the injured takes a settlement, the insurance company offering the settlement will require the injured to sign a Settlement Release before they see any money. These releases are essentially all the same no matter what insurance company is working the case. There are a couple key aspects that the injured will need to be aware of prior to settling. First and foremost is the overarching general release of any and all claims, past present and future. The injured will be accepting a lump sum payment from the insurer in exchange for closing out the file forever. This means that if the injured condition gets worse down the road or the injury precludes a person from working down the road, the injured will not be able open the case back up. I tell my clients, it’s their “one crack at the apple” sort of speak. So, make sure you are well informed prior to taking the settlement because once you sign on the dotted line, the case is closed.
The second very important clause in almost all releases is the “hold harmless from medical liens” clause. If an injured has medical expenses above and beyond what its No-Fault insurer will pay, the injured typically puts the remaining treatment on its own health insurance (ie. BCBS, Medica). Any payments made by the health insurance entity for treatment related to the accident produces a medical lien on any potential settlement amount. If the amount is not resolved at the time of settlement, the “hold harmless from medical liens” clause shields the liability insurer from having to pay. That means, the injured is on the hook for resolving the medical lien. Whenever I handle a case, I make sure that I negotiate with any and all medical lienholders prior to having my client sign the release so that my client can feel comfortable knowing that they won’t get any letters down the road demanding money.
Please send any request for topic suggestions to firstname.lastname@example.org. Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.