Every client and injury victim wants to know how and when they can get compensation. While this topic could take hours to fully explain, below is a brief introduction to the when and how of settlements. If you would prefer to watch a video addressing this subject click here.
1. Pre-Litigation Settlements
Once the client reaches Maximum Medical Improvement (MMI) and understands their future treatment needs and costs, a settlement demand can be made.
Settlement Demand Letter Should Include:
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Itemization of past economic damages (full medical bills and lost earnings).
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Estimates of future treatment expenses and future lost earnings.
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Non-economic damages (typically the largest component), including:
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Pain and suffering
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Mental and emotional distress
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Inconvenience
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Disability and impairment
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Lifestyle impacts, disfigurement, and scarring
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Attachments: Medical records, full billing, and injury photographs.
The letter should conclude with:
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A settlement amount (often the policy limit if known).
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A deadline for response.
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A statement that legal action will follow if no response is received.
2. Settlements After a Lawsuit is Filed
Why file a lawsuit?
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No agreement was reached pre-litigation.
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Statute of limitations is approaching.
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Client hasn't reached MMI, so future damages are unknown.
Settlement Options After Filing:
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Written Demand – Same approach as pre-litigation, but first use discovery to confirm policy limits.
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Mediation – Involves a neutral third party (often a retired judge or attorney) to help reach a compromise before trial.
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CCP § 998 Offer (California) –
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Formal settlement offer that, if rejected, can shift litigation costs.
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If a party doesn't do better at trial, they may owe expert witness fees and other costs—potentially tens of thousands of dollars.
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Carefully consider any 998 offer, whether sending or receiving one.
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Real Case Example:
A client rejected a 998 offer, didn't beat it at trial, and now faces $40,000 in expert cost reimbursement. This tool is powerful and must be handled wisely.
3. Accounting for Medical Liens and Reimbursement Rights
Settlements must also address:
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Liens and reimbursement claims by:
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Health insurance companies
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HMO providers (e.g., Kaiser Permanente)
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Hospitals (with statutory lien rights)
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This is a complex area of personal injury law. Skilled attorneys work to reduce liens and maximize the client's net recovery.
4. Special Considerations
Some cases involve additional planning:
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Special Needs Trusts – To preserve government benefits.
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Structured Settlements – Especially for minors.
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Medicare Set-Asides – For clients receiving Medicare benefits.
Closing Thoughts
Settling a personal injury claim is both an art and a science. It requires:
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Negotiation skills
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Deep knowledge of medical and legal issues
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Familiarity with settlement-impacting laws
If you have questions about your personal injury case or a potential settlement, contact Kohn Law Office for a free consultation.
Call us at 760-721-8182.