Step One: Determine how much you believe the case is worth. This requires you to determine the reasonable past special damages. How much of the medical bills are reasonable? For example, was the patient receiving both physical therapy and chiropractic treatment at the same time? How much of the past wage loss is reasonable, and can it be verified? Even if a person received paid time off they may assert a wage loss claim. Sick pay, paid time off and vacation pay are benefits that the plaintiff worked for and may use up as a result of the negligence of the defendant. Even an injured plaintiff who is salaried may recover the reasonable value of the time they missed from work. Factors to consider, was the person ordered off work by a doctor, or did they decide to miss work on their own? If time off work is not sanctioned by a health care provider the claim may have a reduced value.
Step Two: Calculate how much the plaintiff will net from the expected settlement? This requires you to subtract the attorney fee, advanced costs, liens and unpaid bills to reach the client’s net.
Step Three: Get the client’s consent to settle? Make sure the client consents to the net settlement proceeds before agreeing to settle the case. When possible it can be useful to determine the case value and the client’s net when the case is first signed up. If that is possible have the client approve an estimated net recovery when they are first signed up.
Once you know what the case is worth, what the client will net, and you have obtained the client’s approval, then it is time to go get the money. Here are twelve keys that will motivate the adverse insurance company to pay a reasonable settlement amount.
1. Filing and prompt service of the summons and complaint put pressure on the insurance company to settle.
This is especially true if the insurance policy is $25,000 or less. Good service on the defendant means the insurance company must hire a lawyer to answer the complaint and pay a $300 plus filing fee to answer. The insurance company also has to let their insured know what is going on. At this point the insurance company may get express pressure from their insured to settle the case. An insured may be worried that the case will take up their valuable time. The insurance company may realize that they have a problem with their insured, such as a defendant who will not cooperate or may not make a good witness. At this point the insurer may decide settlement is a good option.
Rookie mistake: When cases are filed but not served the Court will issue an order to show cause which results in lost time and money. The cost of hiring an investigator to locate a hard to find defendant is relatively small compared to the attorney time spent going to repeat Order To Show Cause hearings.
2. Promptly serve a request for production of documents and form interrogatories.
Typical form interrogatories require the defendant to disclose their policy limits. Once you obtain the policy limits obtain the client’s consent for a policy limits demand. If the insurance company rejects a properly worded policy limits demand the carrier is opening up the policy and agreeing to pay any judgment over the policy limits. Making a policy limits demand is a significant pressure point to settle. A great article to read on this subject is, “The ‘Letter Perfect’ Policy Limit Demand Letter” by Ronald J. Cook, March 2011, Plaintiff Magazine,
3. Call the defense attorney and start a discussion about what the case is worth.
Get the defense lawyer talking by asking; what they think the case is worth? Or, what can we settle this case for? Or, what do you think State Farm will pay on this one? Then listen, you will learn a lot. When you file the complaint also send along a formal written offer to compromise setting forth your last communicated settlement offer.
4. Confirm a date for the defendant’s deposition.
Even if the defendant stipulates to liability you must still take the defendant’s deposition. Noticing the defendant driver’s deposition may cause the insured to pressure the insurance company to settle. The insured may not want to be bothered with a deposition. Or the insurance company may realize the deposition is not going to go well.
5. If liability is disputed and there are witnesses take their depositions.
The defense will see you are serious about getting the case ready for trial. You will also have a much better idea about the value of each witness, which will help your evaluation of the case.
6. Once the plaintiff’s deposition is completed and complete answers to question 6.4 of the form interrogatories are served then serve a supplemental interrogatory on the defendant, along with request for admissions on liability and injury causation, accompanied by form interrogatory 17.1.
If a complete answer to California Judicial Counsel form interrogatory 6.4 is provided the defendant must answer the 16 series of the form interrogatories. The defendant must reveal what medical bills they contend are not related to the injury in question. This puts pressure on the defendant to show their position in a verified discovery response, if that position is unreasonable and the response is verified, the defendant’s unreasonable position may help plaintiff prove the defendant is being unreasonable at trial.
7. Request a trial date at the first Case Management Conference.
This is especially true if the insurance company is taking an especially unreasonable settlment position. Some insurance companies are worse than others and have a business model of making unreasonable offers. A trial date puts pressure on the insurance company to settle. The trial date signals the end is near. If plaintiff’s settlement position is accurate, reasonable and well thought out the chances if getting the case settle improve once a trial date is set.
8. Get the case arbitrated quickly.
Once the case is assigned to arbitration, call the arbitrator, and the defense counsel and confirm a good date to arbitrate the case. Arbitration awards put pressure on the defendant to settle. Also some counties will not give you a trial date until the case is either arbitrated or mediated.
9. If arbitration or mediation fails to settle the case, serve another formal statutory offer to compromise.
In California is a statutory offer to compromise is exceeded at trial, the defendant has to pay interest on the judgment from the date of its expiration and all expert expenses incurred since the expiration of the offer. These cost can add significantly to a judgement in favor of plaintiff.
10. Once your formal offer to compromise expires determine what medical doctor is going to review all the records and testify at trial.
Send the records to the doctor, confirm the doctor got the records, and facilitate an exam or updated exam with the doctor and the plaintiff. Consider if the expense of a comprehensive narrative report from your medical expert will help settle the case. Plaintiff’s settlement leverage increases once the adverse insurance company understands you have a competent doctor ready to appear and testify at trial.
11. Once the case is set for trial serve a notice to appear on the defendant.
This may cause the insured to put pressure on their insurance company to settle. “What do you mean I am going to have to take time off work and sit through a jury trial for two weeks?” You have created another pressure point which may result in settlement. The notice to appear puts the reality of the trial date front and center.
12. Negotiate from a position of strength.
Serve trial subpoenas for personal appearance at trial on any necessary liability or damages witnesses, especially any treating doctors that are being relied upon. Nothing hurts the settlement value of a case like not being prepared for trial. Negotiate from a position of strength by showing you are ready for trial.
To summarize, determine the cases worth early on, explain your evaluation to your client and get your approval on a net from the client. This sets up your “letter perfect” policy limits demand, which is followed by your prompt filing and service of the summons and complaint. Serve your State’s formal statutory offer to compromise for the last demand at the claims stage or a figure consistent with your case value determination; engage the defense lawyer, by asking them what they think the case is worth; confirm a good date for the defendant’s deposition and insist on good answers to request for admissions on injury causation and California Judicial Counsel Form Interrogatory 16 series. If the Court orders you to arbitrate set up and complete the arbitration promptly. If the case is not settled by now, get your medical doctors working on their record review and trial testimony. Completion of each of these steps will greatly increase the likelihood your case will settle for a reasonable amount prior to trial. Good luck getting your cases settled.