Settlement Negotiations: How Do They work?
By: Taylor Morin, Associate Lawyer
In a personal injury claim, there are essentially three ways for a file to be resolved: discontinuance of the claim, settlement of the claim, or a trial. In recent years, there has been a substantial shift towards the use of settlement negotiations to resolve claims, as fewer and fewer cases are proceeding to trial. This blog post will address the process of settlement negotiations and how they work.
Generally, it takes at least two years for injured clients to reach a point of maximum medical recovery. Maximum medical recovery occurs when the client is no longer seeing substantial benefits through treatment. Once this has occurred, we are able to predict the long-term consequences of a client’s injuries. Often times, we do not recommend entering into settlement negotiations before this has occurred because we need to be able to assess the long-term implications of the client’s injuries. As they say, “fools rush in”.
Once a client has reached maximum medical recovery, we meet with the client to discuss the options for the resolution of their claim. One of these options is to enter into settlement negotiations with the opposing party. The opposing party is generally a lawyer or insurance adjuster that has been tasked with representing the Defendant’s interests.
Settlement negotiations can occur in a variety of ways, such as: email/letter correspondence with the opposing party, telephone calls with the opposing party, mediations, and settlement conferences under the guidance of a judge. However, regardless of the settlement method employed, the basic principles of settlement negotiations remain the same. Settlement negotiations always involve an assessment of risk. Before entering into settlement negotiations, it is critical to understand the strengths and weaknesses of any given case. This assessment of risk allows us to provide our clients with a best case and worst-case scenario for their claim. By weighing the strengths and weaknesses of a claim, we can advise our client as to what would constitute a reasonable settlement, taking into consideration the potential risks and benefits of proceeding to a trial.
If a client instructs us to commence settlement negotiations on their behalf, we generally start by preparing a detailed settlement proposal. A settlement proposal outlines the entirety of a client’s claim and examines their life before the accident, in comparison to their life after the accident. The settlement proposal identifies the client’s injuries, as well as the impact that those injuries have had on the client’s quality of life and their ability to complete their activities of daily living and employment.
Generally, settlement proposals can be broken down into four categories: pain and suffering, loss of income, cost of care, and loss of valuable services. Once all of the categories have been quantified and the settlement proposal is completed to the client’s satisfaction, it is sent to the opposing party for review. Generally, the opposing party will present a counter-offer to the proposal. Once we receive a counteroffer from the opposing party, we bring the offer to our client and come up with our own counteroffer. This process can go on for weeks or months depending on the circumstances of the case. Often times, this process leads to an acceptable resolution of the claim. However, if the initial negotiations with the opposing party break down, that does not mean that the settlement negotiations are permanently concluded.
If the parties are unable to come to a resolution on their own, there is always the option of scheduling a mediation with a professional mediator. If a mediation is scheduled, the parties prepare a mediation brief. The mediation brief is very similar to a settlement proposal, but it is sent to the mediator for their review. At the mediation, the mediator provides objective guidance to the parties, in an effort to resolve the claim. Generally, mediations occur in hotel boardrooms, with each party in separate rooms. Throughout the day, the mediator meets with the parties independently, in an effort to reach a middle ground and resolve the matter. However, if the mediation fails, the opportunity to settle the claim is not over.
After a trial date has been set, the New Brunswick Rules of Court stipulate that a settlement conference must occur before the parties go to trial. The purpose of a settlement conference is to incentivize settlement between the parties. A settlement conference is very similar to a mediation, but it is done under the guidance of a judge, rather than a mediator. Generally, settlement conferences occur at a courthouse. However, the process is very similar to a mediation, as the judge meets with the parties independently and attempts to guide them towards a settlement.
All this being said, there are several opportunities to resolve a claim without going to trial. Furthermore, even if settlement negotiations are unsuccessful at every stage, the parties are always able to continue negotiations, sometimes right up to the day of a trial.
If you have been in an accident and are injured, you should contact a lawyer immediately. At the Mike Murphy Accident Team, we take great pride in relieving the burden of settlement negotiations from our clients. We will ensure that your interests are represented at every stage of the negotiations and if necessary, at the trial.
DISCLAIMER: The publications on this website are intended to provide information of a general nature and not legal advice. The information contained in this publication is current to the date of the publication and may be subject to change following the publication date.