Sometimes, as lawyers, we assume too much.  For instance, we assume that normal people talk as we do and understand terms that we frequently use.  “Settlement” is among those terms.  It is often assumed that non-lawyers know what this is and what it means when in fact most non-lawyers would have no reason to have this knowledge. 

Though settlements are common to lawyers, they are not so common to those who have been hurt in an accident. In fact, most people hurt in accidents have never been involved in a lawsuit before much less entered into a settlement.

So if you have been injured, and the insurance company is talking settlement, you may be asking “What is a personal injury settlement?”  The question is really best answered in explaining how it is happens in terms of the personal injury settlement process.  However, the gist of a settlement is fairly straightforward and easy to understand.

Simple Definition of “Settlement”

In simple terms, a settlement of personal injury claims is an agreement between the parties that the  lawsuit and claims will be dismissed or given up in return for some amount of money paid to the injured person (the plaintiff).   This leads to the related question many have of “What is my personal injury case worth?
The amount of the settlement will depend on many variables unique to each case.  Essentially, the settlement is based upon an evaluation of the value of the personal injury claims.  The valuation of the claim will turn on the damages or injuries suffered by the plaintiff. 

 Risks and Costs Assessment

However, the value of the claim as determined by damages or injuries may be the subject of honest disagreement.   As such, the settlement amount will also reflect the risks and costs of going to trial to either side of the claim. 

The risk assessment is basically an assessment of what might happen with a jury verdict.  In other words, both sides are trying to assess the risks of losing.  This is often hard to predict since it is hard for either side to predict what a jury might do.  Often, the assessment is more of a prediction of a worst case outcome versus a best case outcome. 

The costs are a little easier to predict.  The costs will vary depending upon the type and complexity of the case.  Certain types of cases are much more expensive than others.  For instance, medical malpractice and products liability cases are far more expensive as a rule than auto accidents.  However, even a simple auto accident case can get pretty expensive if it goes all the way to trial.  These costs will be weighed into the decision on both sides whether to settle and for how much. 


In order to make these calculations, it is necessary to conduct discovery.  Discovery is basically the collection of evidence by both sides to support their position.  However, despite the seemingly simple definition, discovery concepts and rules can be quite complex.  In fact, discovery can be the biggest and most expensive part of the personal injury claims process. 

The thing to keep in mind is that your case probably will not settle until discovery has been completed or at least completed sufficiently for both sides to determine the value of the case along with the risks and costs of going forward with litigation.   Depending on the type of case, this could take many months. 

 Pre-Trial Settlement

Even once discovery is completed, the case may not settle even though it seems a settlement would be in order  It is not uncommon for cases to settle very close to or even on the eve of trial.  And again, this is the whole point of settlement which is to avoid the costs and risks of a jury trial on both sides of the dispute.

 Talk to a Lawyer

Keep in mind that these issues are very complicated.  In fact, each question and issue related to settlement could lead to many branches of other issues and questions.  In addition, every case is different and unique, including yours. 

In short, if you have been injured due to the negligence of another, you should talk to an attorney experienced in personal injury law.  There is no substitute for the guidance of an experienced attorney.