Settlement: Legal Definition

A settlement is the resolution of issues between two or more parties and usually occurs after the parties engage in negotiations over disputed issues. Negotiations can also lead to settlements of insurance claims or civil lawsuits.

Generally, a settlement process begins after a person files a claim or lawsuit over a personal injury allegedly caused by another party. The other party responds with a demand to prove the injury claims or a settlement offer.

No Evidence, No Settlement

An insurance company is more likely to agree to a settlement after obtaining evidence that shows its policyholder caused an injury. Without solid proof of injury, an insurance company may not settle a claim.

For example, a victim injured by the implantation of a faulty hernia mesh would need to be able to prove the mesh caused the injuries and show what those injuries were.

While personal injury victims may have evidence, an insurance company will conduct its own investigation before settling an insurance claim. An insurer may review the claimant’s medical records, medical expenses, and other information related to the claimant’s injury. An insurer may even ask the claimant to undergo an examination from an independent doctor.

A settlement is contingent upon both parties working together to reach an agreement. If a personal injury victim does not comply to requests from an insurer, the insurer may not settle the claim. 

Negotiating a Settlement

An insurance company representing its policyholder can make a settlement offer to the person who brought the claim. Similarly, a lawyer representing a defendant can present a settlement offer to the plaintiff who brought a civil lawsuit.

Both sides begin negotiating for what they want. Plaintiffs, for instance, want to recover compensation and other personal losses resulting from a defendant’s actions. Plaintiffs may also want additional compensation for the pain and suffering they endured because of the circumstance that caused the loss.

Insurers, on the other hand, do not want to pay out too much money for a plaintiff’s losses. An insurer’s aim is to save as much money as possible. So, this sometimes means having lengthy back-and-forth negotiations until the plaintiff and defendant reach a final settlement.

Determining the Value of a Case

The evidence gathered from an investigation helps the parties determine how much the case should settle for based on damages the plaintiff sustained from an injury or loss.

Insurers usually value a claim lower than a plaintiff values the claim, even though the plaintiff provides evidence. A plaintiff may seek help from a lawyer after an insurer denies a claim or devalues the claim and offer settlements that the plaintiff believes is not fair.

While settlements are preferable for both parties, there are instances when plaintiffs decide to take a claim to court and ask a judge or jury to settle the case.

Contact the Law Offices of Ogle, Elrod & Baril, PLLC

If you need assistance in filing a personal injury claim or settling a claim, turn to the Law Offices of Ogle, Elrod & Baril, PLLC. You do not have to handle a case alone. Call us today at 865-546-1111 to see how we can help you.