When you’ve been hurt because of someone else’s negligence or carelessness, you have a right to file a lawsuit seeking compensation for all your losses. Though you can go to trial and let a jury determine both liability and damages, it’s far more common for a personal injury claim to be “settled out of court.” What does that mean? What are the advantages of settling out of court?
An out-of-court settlement simply means that the parties to a legal dispute have found a way to resolve their differences without the further involvement of the court or the legal process. As a part of the settlement of a personal injury claim, the plaintiff (person seeking compensation) typically agrees to accept a fixed dollar amount to cover any losses. In exchange for that payment, the plaintiff customarily agrees to relinquish any remaining right to seek or recover compensation for those injuries. The settlement agreement, a legally binding contract, is then put in writing and signed by all parties. As a general rule, the terms of a settlement can be kept private, whereas the rulings of the court are a matter of public record.
Perhaps the most significant benefit to settling out of court is that the injured party receives compensation much sooner. The trial process can be long and arduous…simply gathering evidence can take months or years. Even if the case goes to trial within a reasonable period of time, there may be appeals that take years to resolve. By settling, the injured party has an assurance of receiving funds in a timelier manner.
Settling the case out of court can also minimize stress and anxiety. Trials are fraught with uncertainty and unpredictability, and can be time-consuming as well. An out-of-court settlement can eliminate days or weeks of worry as a trial proceeds.
An early out-of-court settlement can also reduce the out-of-pocket expenses incurred by the injured party. Though most personal injury attorney charge a contingency fee, collecting a percentage of the settlement or verdict as compensation for legal representation, the actual costs associated with the lawsuit—filing fees, court reporting fees, and the like—must typically be paid by the client.
