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.

By , J.D. · University of San Francisco School of Law
Updated by David Goguen, J.D. · University of San Francisco School of Law

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.

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 later refuse to accept the settlement money. Even if the case is in the lawsuit phase, the lawsuit is now over.

Bottom line: You can never reopen a claim against a defendant that you settled with. If you settled with that defendant before filing a car accident lawsuit, 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 car accident case after you agree to settle it is if you can't 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 Your Car Accident Settlement Was Reached Prior to a Lawsuit

If you settle a car accident claim 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 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 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 Settle a Car Accident Case That's 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.

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).

What If There Are Other Potential Defendants?

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.

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.

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.

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