In personal injury cases, we are almost always (over 99.9 percent) dealing with an insurance company when it comes to seeking compensation for a client’s injuries. We have had one case in the last 27 years where the individual defendant was uninsured and paid for our client’s damages out of his own pocket. In most cases, after the client finishes with their medical treatment, we prepare what is called a “settlement package.” This document contains a ton of information, including the client’s medical records and bills, photographs of injuries, vehicles, the scene, as well as videos from witnesses, investigating police officers, and medical treaters, plus a detailed narrative letter from us setting out the story of the case. This story begins well before the incident at issue by describing what the client’s life was like before the incident, then it covers how and why the incident occurred and who is responsible for the incident, the mechanism of injury, the medical treatment, the recovery, and finally where the client is in terms of healing at the time the settlement package is prepared. We send this settlement package to the responsible party’s insurance company for review. After the at-fault party’s insurance company evaluates the claim, an insurance adjuster usually contacts our office and makes an offer of settlement. This begins the negotiation phase of the case. Sometimes it takes several moves by both parties to resolve a case. Sometimes we stand firm on our demand and the insurance company agrees to pay their policy limits. Most cases are able to be settled without a lawsuit. But sometimes that is not possible.
There are usually three reasons a case does not settle. Either:
- The insurance company denies liability and refuses to make an offer of settlement,
- The insurance company makes a lowball offer and refuses to negotiate, or
- The parties have a legitimate disagreement about the value of the case.
The decision about whether or not to file a lawsuit is a client decision. As a client’s attorney, we help the client understand all of the available legal options and then make an intelligent decision based on what is known at the time.
Lawsuits And Litigation
Lawsuits are necessary in approximately 10 percent of all the cases that we handle. Once a lawsuit is filed, the parties begin the discovery process where each side gets to send written questions and requests for documents to the other side. These written questions (called interrogatories) and requests for documents must be answered according the Rules of Civil Procedure. Then the parties start taking depositions. Depositions are the process where attorneys get to learn what parties and witnesses are going to testify about in the case. Depositions are basically where an attorney gets to ask a party of witness questions while the party or witness has taken an oath to tell the whole truth and nothing but the truth. Depositions are required to be recorded by an official court reporter and they are often videotaped too. After a deposition is finished, the court reporter types up everything that everyone said during the deposition and creates a transcript. Deposition transcripts can be read to the jury as evidence if the case goes to trial. After depositions are completed, the parties go to a court ordered settlement conference called a mediation. A lot of cases settle at mediation. All parties have to attend the mediation along with all insurance representatives. A neutral third party, called a mediator, runs the mediation and helps the parties negotiate toward a resolution of the case. If the case cannot be settled at mediation, then the mediator declares and impasse and the case continues to move toward the courthouse. Of the cases that do not settle at mediation, almost all of them settle between mediation and the courtroom. Less than 1 percent of all lawsuits end up in front of a jury.
Jury Trials And Insurance
For those cases that do go to jury trial, it is usually because the defendant’s insurance company has either refused to accept responsibility for the incident, or they deny that the incident actually caused the injured person’s injury. In a lot of cases, the insurance company simply does not think the case is worth very much money and they refuse to offer more than a small settlement amount. This forces the injured person to fight for what they think is fair compensation. There are two doors to the courthouse. One door is for the folks who can afford to pay a lawyer by the hour, usually to the tune of $200 to $300 per hour. The other door is for those folks who do not have that kind of money, and those people hire their lawyer by agreeing to give the lawyer a percentage of the recovery. They join together and either rise together or fall together. That percentage is usually 33 percent or 40 percent. The lawyer usually covers all of the litigation expenses while the case is going on, but the North Carolina State Bar requires that the client reimburse the attorney for those litigation expenses out of any recovery. For cases that make it all the way to trial, the expenses range from $10,000 all the way up to over $100,000 depending on the type and complexity of the case. If there are expert witnesses involved, it will be an expensive case.
Once the case actually gets to the courtroom, the attorneys, parties, and witnesses are strictly prohibited from mentioning anything about auto insurance, health insurance, or any other type of available insurance. There is actually a law (statute) that prohibits mentioning liability insurance in the courtroom. While you cannot say the word “insurance” in the courtroom, there is always insurance at play in these cases. We have always felt that this was deceptive to the jurors and contrary to the standards of justice, but the insurance lobby fights tooth and nail each time there is an attempt to change this law.
The insurance company closely monitors the case even during trial, and there is usually an insurance adjuster sitting in the back of the courtroom watching it unfold. The insurance company is also paying for the defendant’s lawyer and all of the lawyer’s litigation expenses. Jurors often think that any money they award to the injured person will have to be paid by the defendant out of his/her own pocket, but that is not the case. When the jury returns a verdict to compensate the injured person, then the insurance company pays the amount of the verdict, and the defendant pays nothing out of his/her own pocket.