There are easily hundreds of thousands of plaintiffs and defendants currently tied up in personal injury cases nationwide. Luckily for the state and federal courts, most of these cases will never make it to trial; the vast majority will reach a settlement. There are number of reasons for this.
The personal injury lawsuit process (called "litigation") is fraught with uncertainty. Surprises can come up at any time, especially during the "discovery" phase, when the parties exchange information and seek to build the evidence they will present at trial. Sometimes an investigator finds a crucial piece of evidence, or the plaintiff gets flustered into saying the wrong thing during a deposition.
Then there’s the trial itself. Witnesses can buckle under cross examination or not show up, judges can make wrong evidentiary rulings and the court can impanel a runaway jury. Sure, there’s the option of filing an appeal, but an appeals court can’t reverse all trial decisions, even some that are wrong. And an appeal can easily cost tens of thousands of dollars and take years to complete.
Litigation is expensive, especially in personal injury cases that require the use of expert witnesses, whose time is extremely valuable. The preparation of reports, time spent traveling, and time spent testifying can add up to a significant amount of money. And some personal injury lawsuits will involve several expert witnesses for just one side. (Learn about expert witnesses in the context of a medical malpractice lawsuit.)
Another reason personal injury cases are expensive is because they take a lot of an attorney’s time. If a case goes to trial, an attorney can easily spend thousands of hours preparing pleadings, analyzing discovery, reviewing documents, prepping witnesses, and arguing motions in court. By reducing the amount of time and effort spent preparing and conducting a trial, each side can save a large amount of money in legal fees.
In certain cases, the plaintiff could be liable for the defendant’s litigation and attorney costs if the plaintiff loses at trial. Or even if the plaintiff wins at trial, if the verdict isn’t much higher than the defendant’s settlement offer, the plaintiff could have to pay the defendant’s legal fees and court costs. So by settling the case, the plaintiff avoids the risk of having to pay these expenses. Learn more about "costs" in personal injury cases.
The filing of a personal injury complaint (the document that starts the lawsuit) to the issuing of a verdict can easily take over a year (sometimes several years). Even if a plaintiff wins at trial, that’s a long time to wait for compensation for injuries. Then there’s the potential for an appeal, which can add another few years to the time it takes to complete a personal injury case.
From the attorney's perspective, settlement is usually optimal (and sometimes necessary) for the simple fact that most attorneys could not effectively handle their clients’ cases if they all went to trial. Not only would the workload be too much to handle, but many law firms would literally run out of attorneys to make court appearances.
Besides that, many law firms that represent plaintiffs are volume-driven businesses. In other words, they take on a large number of cases anticipating that most of them will settle. Even if the settlement amounts aren’t that large, with enough cases, an attorney can still be profitable. Learn more about how personal injury lawyers get paid.
Courts are public, so anyone can observe what goes on in the vast majority of proceedings. If a personal injury lawsuit goes to trial, a lot of previously private information will now be available to anyone who is curious. Most individuals and organizations involved in litigation would prefer that details of their cases not become public knowledge.
A settlement usually provides some level of privacy. A plaintiff may want to avoid sensitive medical information becoming part of the public record. Or perhaps a corporation wants to keep embarrassing employee conduct or a malfunctioning product from making headlines.
Litigation is difficult for everyone involved. Even corporate defendants don’t like it. Employees and corporate officers need to take time out of their day to prepare to testify at depositions, gather documents for discovery, or talk to the company’s lawyer about the case.
Then there’s the plaintiff, who might have to relive a very painful event over and over again during the pre-trial process. When there’s a trial, the plaintiff may need to be in open court in a potentially emotionally vulnerable state. On top of all that, there’s the uncertainty we touched on a few sections earlier. Many plaintiffs will gladly give up the chance to increase their damages award if they can avoid stress and receive a guaranteed settlement check.
These considerations don't apply to all plaintiffs. For some, going to trial is the whole point of litigating. It’s an opportunity for them to literally have their day in court. For these folks, the trial process probably means more than the money. But these types of plaintiffs are fairly rare, and if a settlement offer is large enough, even those who are determined to litigate might choose to take the certain thing.
The vast majority of settlement agreements utilize language that lets the defendant admit no liability while agreeing to pay the plaintiff money. This can be important to a defendant that wishes to maintain a particular public image.
For details on settlement trends in the most common type of personal injury case, learn more about why most car accident cases settle.