Can You File a Lawsuit After a Car Accident Settlement?

Once you reach a car accident injury settlement, that typically signals the end of your case, although there are a few uncommon instances in which your claim can continue in one form or another. In this article, we'll explain:

• why the settlement and release agreements are such critical documents in a car accident case, and why they're so hard to "set aside" after they're signed
• your limited post-settlement options, which largely depend on whether there are other potential defendants in your case, and the terms of any settlement/release you've already signed, and
• why, with respect to each defendant that you settle with, you can almost never file a car accident lawsuit against that same party.

A Car Accident Settlement Release Is Usually Final

If you settle your car accident claim and sign a release of liability, your claim is almost certainly over, even if you later refuse to accept the settlement money.

You can never reopen a claim against a defendant that you've officially settled with. If you settled with that defendant before filing a car accident lawsuit, you can never sue that defendant over the crash. This is all assuming your car accident settlement hasn't been "set aside" by a court.

When Can a Car Accident Settlement Be "Set Aside"?

Just about the only way you can reopen a car accident case after you agree to a settlement is when a court agrees to set the settlement aside.

Depending on the law in your state and the circumstances that led to the settlement—including how it was negotiated and how your signature was ultimately obtained—you might be able to argue that:

• you were under some kind of duress (including threats or intimidation from the other party) when you agreed to and/or signed the settlement
• the other party had key information that would have affected your decision to accept the settlement, and they kept that information from you, through fraud or intentional withholding, or
• you and the other party both had mistaken beliefs about some crucial aspect of the case (for example, there was an insurance policy that covered the underlying accident, but neither you nor the other person knew about it)

Of course, whatever argument you're making, you'll need to be able to prove that what you're claiming is actually true in order for the court to decide not to hold you to the terms of the settlement.

If Your Car Accident Settlement Was Reached Prior to a Lawsuit

If you settle a car accident case at the car insurance claim stage, and don't want to sign the release that the insurance adjuster sends you, it's probably time to get a lawyer. You probably won't be able to take the dispute any further on your own. The adjuster isn't likely to change their position.

However, keep in mind that even if you hire a lawyer at this stage, the adjuster still might not renegotiate the release. In that case, you'll 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 Settled a Car Accident Case That Was Already in Court

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.

Does a General Release Cover All Future Car Accident Claims?

Remember that, whenever an injured person reaches a personal injury settlement, they need to sign a release before the at-fault party or its insurer will pay the settlement proceeds. This is usually referred to as a "general release," and signing it will typically prevent you from ever bringing another claim against the same party over the same accident. But in several states, there's a law that still gives you the right to file a claim against the other party in (fairly rare) circumstances. Let's look at an example.

What Is a "Section 1542 Waiver" in California?

In California, the state's Civil Code section 1542 says that a general release doesn't extend to claims that the injured person "does not know or suspect to exist" and that, if they had known about such claims, that knowledge would have "materially affected" the injured person's agreed-upon settlement. So, this rule leaves the injured person with options against the other party if certain conditions are met, even after the settlement is agreed to.

But most California injury claimants will be asked to sign a settlement deal that includes what's known as a "section 1542 waiver," in which they give up the right to bring any future claim that section 1542 gives them the right to make. In other words, when an injury settlement includes a section 1542 waiver, and an injured person signs it, they've likely closed the door to relying on section 1542 to reopen the claim process (unless a court says that the waiver shouldn't apply, for some of the reasons we covered earlier).

What If I Think My Lawyer Gave Me Bad Advice?

Even if your lawyer gave you bad advice about settling your car accident case, 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).

Can I Sue Other Defendants After I Sign a Personal Injury Release?

In general, settling a claim against one potential defendant doesn't 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 and make sure it doesn't limit your options against others.

Getting Help With Your Car Accident Case

As we touched on earlier, if you've already signed a settlement agreement and a release with respect to your car accident injury claim, and you want to reopen your injury claim in any form, there probably isn't much you can do on your own.

Whether it's getting a settlement agreement set aside (an uphill battle to say the least) or pursuing the possibility of other defendants and other avenues of compensation, it's essential to have a qualified car accident lawyer on your side at this point.

There's no guarantee that a lawyer will be willing to take your case, of course. But getting feedback from an experienced legal professional can be valuable, even if it's bad news. What do we mean by that? Let's say a lawyer (or two or three of them) considers your situation and concludes that there aren't any viable options available to you when it comes to getting more out of your car accident claim. That kind of objective, expert opinion might help you put the matter behind you and move on.

Learn more about how a lawyer can help with a car accident case, and get tips on finding the right injury lawyer.