Can You File a Lawsuit After a Car Accident Settlement?

A settlement typically means the end of your car accident claim, but in some rare situations a lawsuit still may be an option.

Once you reach a car accident settlement, that typically signals the end of your claim, although there are a few rare instances in which the case can continue to the car accident lawsuit phase. Whether or not this will be an option for you depends on how many potential defendants were in the case, how many of those defendants you settled with, and the terms of the settlement. Just keep in mind that, with respect to each defendant that you settle with, you can almost never file a lawsuit against that same party. Read on to learn more.

Once You Sign The Release, You Cannot Change Your Mind

If you settle your car accident claim and sign a release of liability, your claim is over, even if you subsequently refuse to accept the settlement money. Even if the case is in the lawsuit phase, the lawsuit is over.

Bottom line: You can never reopen a claim against a defendant that you settled with. If you settled with that defendant before filing suit, you can never sue that defendant.

You May Be Able to Set Aside the Settlement

Just about the only way that you can reopen a case after you agree to settle a car accident case is if you cannot agree with the defense attorney or insurer on the terms of the settlement.

Remember that, whenever a plaintiff reaches a personal injury settlement, the plaintiff has to sign a release before the defendant and/or its insurer will pay the settlement proceeds. Most releases in car accident cases are very straightforward, but, occasionally, the parties have a dispute over the terms of the release. If the dispute is serious enough, the plaintiff or claimant can sometimes, but not always, back out of the settlement. The procedures differ depending on whether the plaintiff settles the case before or after filing suit.

If Settlement Was Reached Prior to Suit

If you settle a car accident claim prior to suit without a lawyer and don’t want to sign the release that the insurance adjuster sends you, now it is time to get a lawyer. You probably won't be able to take the dispute any further on your own. The adjuster will likely never change his/her mind based on what an unrepresented person says.

However, keep in mind that even if you hire a lawyer at this stage, the adjuster may not renegotiate the release. In that case, you will have two choices: either sign the release and take the settlement money or file suit and take your chances that a judge will allow you to back out of the settlement or get the release changed.

If You Settle a Case in Suit

In this situation, your lawyer and the defense attorney will argue over the terms of the release. Usually, they will resolve their differences and come up with a release that your lawyer will advise you to sign. If they can’t come to an agreement, they will submit the dispute to the judge and allow the judge to decide. Depending on the circumstances, the judge will either order you to sign the release as written, order that the release be changed, or declare that the settlement is cancelled and order the parties to continue with the lawsuit.

What If I Think My Lawyer Gave Me Bad Advice?

Even if your lawyer gave you bad advice about settling, you still won’t be able to back out of the settlement or file a new lawsuit against the defendant that you settled with. That case is over. The only option you likely have at this point is to file a lawsuit against your lawyer for mishandling your case to such an extent that he or she committed legal malpractice (which is always a tough case to make).

What If There are Other Potential Defendants?

In general, settling a claim against one potential defendant does not prevent you from filing suit against other potential defendants in your case (as when there are multiple parties involved in a car accident). But you will need to read the release very carefully. Releases often say something like, "In return for the settlement money, the plaintiff agrees to give up all potential claims that he/she might have against anyone for the injury in question." Insurers do not use this language because they want to protect all other potential defendants; this is just standard language to make absolutely certain that the settlement means that you can never sue that defendant and that insurer again.

If you find yourself in this situation, it's a good idea to put your case in the hands of an experienced car accident lawyer.

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