According to the ads on late-night television, a car accident could be your path to riches. See that lawyer and get a big check. Is it really that easy?
This post is not legal advice, and every case is different. Generally, personal injury attorneys work on contingency fees--they get a portion of the recovery--and they offer free initial consultations during which they evaluate your case and decide whether they want to become involved. If you are injured in a car accident, it doesn't hurt to see someone.
Still, you may wonder: "Is it worth it to sue"? or "How much can I get if I sue?"
Elements that determine the value of a lawsuit
There are three elements that determine the value of a lawsuit:Liability: Whose fault was the accident? If the accident was your fault, your health insurance will pay your medical bills, not your automobile insurance (except in a few states). They don't pay for pain and suffering, lost wages, or losses suffered by other family members because of your injuries. The higher the chance that the accident was the other party (ies)' fault, the higher the value of the lawsuit.
Damages: What problems did the accident cause you? Do you have medical bills? Lost wages? Property damage? Has it affected your ability to fulfill family obligations or to be intimate with your spouse? Will it keep you from earning a living in the future? Did it cause pain and suffering. Damages are divided into Special Damages which are numbers you can prove with bills (like medical expenses) or that an economist or other expert can compute (like loss of earning capacity or future medical expenses). General Damages are things like pain and suffering, inconvenience or aggravation. Most areas have a range that is considered normal depending on the body part being treated, the length of treatment and the type of treatment. Around here, $2,000 per month of treatment for sprains and strains is in the range.
Insurance: While there are a few people who could afford to pay a judgment out-of-pocket, most personal injury judgments or settlements are paid by insurance companies. Therefore, the size of the policy has a direct effect on the value of your lawsuit. Generally speaking (and there are always exceptions to the rule) people with large insurance policies have lots of money and people with small policies have few assets. It doesn’t matter if you have $100,000 worth of damages if the policy at issue is only worth $15,000, unless the policy owner happens to have money.*Part of Financially Savvy Saturdays on brokeGIRLrich.*
Putting It All Together
When an attorney evaluates a personal injury case, he or she looks at all three elements to determine whether to take a case and how much effort and money to allot to it. The accident may be the other person’s fault but if the only damages are to your car, it isn’t worth the attorney’s time to take the case. If who is at fault is up for debate, but your injuries are severe and the person who hit you has a big insurance policy, the attorney may be willing to gamble. Most cases are resolved via settlement. Both sides look at liability, damages, and available insurance and they negotiate a resolution both attorneys see as reasonable. Few attorneys really want to try cases. Trials are expensive, time-consuming and unpredictable. They are a last resort when the attorneys have very different ideas of what the case is worth.
What Do I Get?
Not nearly as much as the commercials lead you to believe. The first person to get paid out of any settlement or judgment is the attorney--funny how that works. Depending on the stage at which the case is settled or judgment paid, and the contract you signed, the attorney can get anywhere from 30% to 50% of the gross proceeds. Next, the expenses have to be paid. These expenses include medical treatment (often the attorney advances the cost of medical treatment by doctors of his/her choosing, or if a client uses his/her health insurance, the health insurance company may want to be reimbursed). They also include the costs of litigation including copies, experts, deposition fees or even the attorney’s parking and mileage. In short, the injured party should not expect to walk out of the room with more than about ⅓ of the settlement amount.