Why might it be a good idea to settle your personal injury claim for less than it is worth? Can it ever be a good idea?
The big questions with any personal injury claim are:
Throughout a claim for compensation for personal injuries, it is part of your solicitor’s job to manage your expectations. Looking at the first of those two questions above, it is important to try and make sure that you don’t get unrealistic ideas about the value of your claim.
This is not always easy to do. In cases of serious injury, while you are still recovering, it is not possible to value the claim with any certainty.
But, assuming you have reached the stage where you have fully recovered from your injuries (or recovered as far as you are likely to recover), it should be possible for your solicitor to get all the medical evidence they will require to be able to value your claim on a “100%” basis. From there, you have a benchmark against which you can judge the reasonableness of any settlement offers.
There are many reasons why it might be reasonable to settle for a lower amount than your solicitor’s own valuation of the claim. Here are 4 reasons to settle a personal injury claim at less than full value.
- There is no “right” answer for a claim’s value;
- Liability may be in dispute;
- The opponent may allege contributory negligence;
- Having raised a court action, you may face a well-pitched Minute of Tender
No “right” answer
Your solicitor will value the claim on a “best case” scenario.
However, if the case ends up being decided by a judge, it is unlikely that each different element of your claim will be valued at the maximum possible value. By “different elements”, we mean some or all of:
- general damages / solatium for your injuries;
- wage loss, past and future;
- services provided by relatives, and
- miscellaneous expenses (e.g. private medical costs and travel expenses).
The valuation of personal injury claims, whilst to some extent an arithmetical exercise, is more an art than a science. In other words, it is reasonable for there to be a discount applied to a valuation, during negotiations, for the fact that reasonable people can reasonably disagree on the fair value of the various parts of a claim.
Liability in dispute
In other words, your opponent may dispute that there has been any breach of duty by them at all – meaning that, if they are correct, your claim could fail completely.
That means there will be a ‘litigation risk’ on both sides. For them, the risk that you might be wholly or partially successful; for you, the risk that your claim might be valued a lot lower than expected or totally fail.
In the face of a well-pitched settlement offer, this can create pressure to settle the claim.
Possible contributory negligence
Your opponent may allege contributory negligence. This is where they accept that the accident was their fault but claim that you also contributed to the damage you suffered, by a failure to take proper care for your own safety.
Where contributory negligence applies, it reduces your compensation by a percentage. Your solicitor can advise you on the likely highest and lowest percentages which could apply in your case. In some situations – e.g. failure to wear a seatbelt – the applicable percentages can be predicted with a high level of confidence.
However, nothing is ever certain in litigation and you may have to accept a discount for the possibility of contributory negligence applying, even if there is a chance that a court could rule that there was none.
For more information see, for example, the contributory negligence articles on our Moray Claims website.
Minute of Tender
In the context of a court action, taking into account one, some or all of the 3 factors mentioned above, your opponent may lodge what (in Scotland) is called a Minute of Tender.
The Tender offers a sum of money in settlement, almost invariably less than your side’s best case valuation of the claim. Should you accept?
Tenders are complex and, for a full explanation, see the article about Minutes of Tender on our Moray Claims website. Suffice to say here that, if you choose not to accept the Tender and you proceed with the claim, if the court awards you less than the tendered amount, you will suffer a penalty in court costs.
How we can help
If you have any questions about anything discussed in this article, feel free to contact us. All initial enquiries are free of charge and without obligation. You can call Marie or Peter on 01343 544077 or send us a Free Online Enquiry.