What does it take to settle a motor vehicle accident case? To a large extent it usually involves a calculation of the risk posed by taking the case to trial. From the perspective of the victim plaintiff the amount will generally (1) meet the needs of the plaintiff and (2) be sufficiently large that proceeding to trial would likely not lead to a significantly larger verdict or would present a significant risk of a verdict lower than the offer.
From the perspective of the defense the amount will generally (1) be lower than the amount of available coverage and (2) avoid a significant risk of a substantially larger verdict amount. Sometimes, however, the defendant's insurance company refusal to settle seems to go contrary to the risk involved.
Sometimes the best the two sides can agree to in their negotiations is a range that represents the minimum the plaintiff would be willing to accept and the maximum the insurance company would be willing to pay. When this happens the parties sometimes work out a high-low agreement. Under the agreement they take the case to arbitration or trial but agree beforehand that (1) the plaintiff is guaranteed to receive a certain minimum amount should the award from the arbitration or trial be lower and that (2) the defendant (through the insurance company) will only pay up to a certain amount should the award be higher. This allows the parties to control their risk.
Sometimes the two sides evaluate the case very differently. Below we examine a case involving a head-on accident after the speeding defendant made an illegal turn. Even though the case presented a very high risk of a large verdict the insurance company just did not seem to appreciate the risk of going to trial.
In one case report the driver slammed head-on into another car after illegally making a left hand turn as he was speeding. The plaintiff victim was the driver of the car that was hit. The plaintiff victim suffered several fractures to her leg and arm. She also suffered a brain injury and was sent into a coma. When she came out of the coma she experienced problems with her memory, with her speech, and with her cognition. She also experienced difficulty with her gait. She could not return to work. She will, for the rest of her life, require 24/7 help for her normal daily activities.
The law firm that handled the case for the plaintiff victim filed a lawsuit against both the driver who hit her and the owner of the car involved. Even with clear liability and with serious injuries including a permanent disability and large medical and care expenses (both already incurred as well as future expenses) the insurance company that insured the defendants made a settlement offer of a mere $150,000. The law firm representing the plaintiff was able to report that they took the case to train and achieved a jury verdict in the amount of $8.875 million for the plaintiff victim.
The lack of willingness to settle this case for an amount commensurate with the nature and extent of the injuries sustained by the plaintiff victim seems to defy explanation. If the insurance company adjuster believed the defense would win on liability then one would expect no offer. The offer actually made was clearly much higher than mere nuisance value. But then if the adjuster believed the plaintiff would win on liability it is by no means apparent how the adjuster arrived at $150,000 as the amount to offer.
Although details were not provided in the case report it is unlikely that this amount would have covered the medical expenses (including future life case expenses) and loss of earning capacity suffered by the plaintiff victim. Under these circumstances the attorney representing the plaintiff victim just needs to thoroughly prepare the case for trial.
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