This is a follow up of the post entitled How to Negotiate a Personal Injury Settlement- Part 1.” The first step in negotiating a personal injury settlement is to send a letter to the defendant’s insurance adjuster with medical documentation to support it long before the client completes treatment. The purpose of this post is to detail the second step in negotiating a personal injury settlement. The second step involves sending a settlement demand package.
The settlement demand package should be prepared after the plaintiff reaches maximum medical improvement. Maximum medical improvement is the term doctors use to mean that the plaintiff’s physical condition is not going to improve with more medical treatment. The plaintiff reaches maximum medical improvement after all potential medical solutions have been exhausted. Before taking the second step, it is important to ensure that there are no other available medical solutions for the client. For instance, many of my clients suffer from chronic pain. Many attorneys have their clients undergo chiropractic treatment or treawtment with a physiatrist, obtain a permanent impairment rating, then send a settlement demand without exploring other options. This is a mistake. If a personal injury client is still suffering pain after a course of chiropractic or physical therapy, that client should consult a pain management specialist, and should probably undergo injection therapy, if the pain management specialist so recommends. Likewise, every client who has a potential surgical option should explore that possible option with an appropriate specialist. If the specialist recommends surgery and the surgery could alleviate the plaintiff’s symptoms, the plaintiff should consider undergoing the surgery before initiating settlement negotiations with the defense adjuster.
This is important for two reasons: If the plaintiff has the option of surgery to alleviate the symptoms and refuses, it is an indication to the insurance adjuster and to a potential jury that the symptoms are not severe enough to justify surgery. The severity of the symptoms is a major factor in determining the value of a case. Secondly, if the plaintiff refuses surgery, he will have a very hard time obtaining compensation for the costs of the surgery, the pain, suffering, and inconvenience related to the surgery, and the lost wages incurred when recovering from the surgery. If the plaintiff settles the case before having surgery, in general he will receive substantially less money than if he waited and settled the case after surgery. I had one case that settled for $400,000 after a disc replacement surgery, whereas pre-surgery the adjuster had offered $20,000 to settle the case. I had another case that settled for the $200,000 policy limit after a fusion surgery, whereas pre-surgery the defense adjuster had offered $25,000.
Once the plaintiff has exhausted all possible medical solutions, the plaintiff’s attorney should write a settlement demand letter and supplement the letter with a copy of the police report, photographs of vehicle damage in automobile accident cases, photographs of the accident scene, copies of witness statements, medical bills, a mileage log detailing miles traveling back and forth from medical appointments, and any other evidence gathered that can support the claim. The demand letter should include a short summary of the facts of the case, the plaintiff’s theory of liability detailing why the defendant is responsible for the plaintiff’s injuries, a summary of the plaintiff’s medical treatment, a summary and list of the plaintiff’s medical bills, lost wages, and other economic losses, and a request that the defendant make a settlement offer to avoid litigation.
A lot of attorneys like to offer to settle for a specific number in the initial demand letter. This is a mistake. In any negotiation it is wise to get the offer from the other side first. People who study the art of negotiation know that negotiation is about moving the other side closer to where you want to be. If you can do this without making any moves yourself, you have won the first battle. I always elicit the first offer from the defense adjuster. Rarely do I receive an objection. Insurance companies have a duty to try to negotiate their insured’s claims in good faith. If an insurance company rejects a request for a reasonable settlement offer, they could be setting themselves up for a bad faith claim.
So the second step in negotiating a personal injury settlement is to send a settlement demand package after the plaintiff has reached maximum medical improvement. For information regarding the next step in negotiating a personal injury case, click here.
Jimmy Fasig
