Not getting the settlement you want? Go to trial.

I have a big case going with an insurance company that doesn’t usually like to pay fair settlements.  I was talking about the case with the attorney who referred it to me recently.  It reminded me of another case I had against the same insurance company a couple of years ago.

Long story short is that I represented a young laborer who had a major foot/ankle injury on the job.  He was given permanent restrictions that the employer couldn’t accommodate and since he made a lot of money, he became a wage differential case.  In fact he was at the highest rate for a wage differential that you could be.

When settling a wage differential, attorneys try to figure out what the present cash value is for that amount, e.g. put the value of a lifetime of benefits in to your hands now.  You don’t get 100% of full value, but in most cases we get 70-80% of full value depending on the age of the client and the strength of the case.

In this older case, we determined that the wage differential value was about $400,000.00.  We asked for a present cash value of $320,000.00, with the client willing to take anything close to $300,000.00.  This insurance company said that they wouldn’t pay more than $200,000.00, EVER. 

Okey dokey we said and took the case to trial.  The Arbitrator awarded my client $500 a week which equates to $26,000.00 a year.  Plus his medical rights were kept open.  At the end of the first year, I pointed out to the insurance company that they had paid $26,000 and the present cash value had dropped by a little over $1,000.  I again asked for 320k and they said nope.  The next year I pointed out that they had paid $52,000 and the present cash value was still around $397,000.00.  They still weren’t interested.  I made the same point the next year as well and on top of that, they had to pay some medical bills for my client.

In the 4^th year I got a call out of the blue asking for a settlement.  Coincidentally, my client was in a big financial jam and wanted to settle.  The case ended up going for $275,000 and if my client could have held out a few more weeks (damn you recession!!!),  we would have certainly hit his 300k goal.  That said, because we went to trial, if you include what was paid over 3.5 years plus the amount they paid in the month when we waited to go to trial and get the result, we ended up at around $375,000.00. 

What happened in this case is what always happens; some supervisor wonders why a case is on the books and wants to get rid of it so they offer more than they said they would.

So the moral of the story, especially if you have a big case, is that if you don’t like the settlement offer, go to trial.  You are still going to get weekly checks if you win and if you are getting wage differential or permanent disability benefits, someday you can still come back and settle.