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Negotiation

 

Negotiation

Negotiation is when two parties exchange evidence, offers, and counteroffers to reach an agreement on an issue in dispute. In the context of a personal injury claim, the goal of negotiation is usually to reach an agreement on how much compensation the liable party will pay to the victim of a personal injury in compensation for injury.

The main alternative to negotiation, of course, is a courtroom trial. In most cases, both parties prefer to reach an out-of-court settlement instead of a trial because of the time, expense, and unpredictability involved in a trial. Other alternatives include alternative dispute resolution

measures such as mediation and arbitration. Negotiation, however, is by far the most popular way of resolving a personal injury claim. The following is a general description of the process.

The Initial Consultation

The Initial ConsultationAlmost any personal injury lawyer will offer you a case consultation free of charge. The purpose of the consultation is to determine whether your claim is worth pursuing. Some claims are simply not viable, while others are too small to bother with.

If the lawyer considers your claim both viable and valuable, they might offer to represent you on a contingency fee basis, in which their legal fee is set as a pre-agreed percentage of the total compensation the lawyer obtains for you.

The Investigation Stage

Once you hire a lawyer, your lawyer will begin investigating your case. They might obtain a copy of the police report, interview witnesses, look at your medical records, and take other actions depending on the facts of your case. Some of the evidence your lawyer needs might be in the possession of the opposing party, and the opposing party might be reluctant to share it. See below for the remedy to this problem.

Procedural Formalities: The Demand Letter and the Reservation of Rights Letter

Your lawyer will send the liable party (probably an insurance company) a formal demand letter that will describe your claim, justify it, and demand monetary compensation. The insurance company will respond with a “reservation of rights letter,” stating that they will investigate your claim and reserve the right to reject it if it turns out invalid or outside the scope of their policy coverage.

Offer and Counteroffer

The insurance company will probably make an offer early on. You can be almost certain that their first offer will be utterly inadequate. Your lawyer will respond with a counteroffer that reflects their estimate of the true value of your claim, plus a little “padding” to give your lawyer room to negotiate.

Non-Economic Damages

Non-economic damages are intangible harms such as pain and suffering and mental anguish. Consider the difference between negotiating a settlement for medical bills and negotiating a settlement for pain and suffering. Because non-economic damages are intangible, they are difficult to negotiate. Unfortunately, non-economic damages are unavailable for workers’ compensation claims.

This stage is when the assistance of a skilled personal injury lawyer becomes extremely important. Your lawyer can make a big difference in the money you eventually receive for non-economic damages. This is critical because, in many cases, the value of non-economic damages far exceeds the value of economic damages.

The Pretrial Discovery Process

The pretrial discovery process gathers information and evidence that the opposing party or a third party (such as a bank) has in their possession. The disadvantage of pretrial discovery is that you have to initiate a formal lawsuit to gain access to its benefits. The advantage is that the court can sanction a party for refusing to cooperate with the other side’s discovery requests. Your lawyer can help you in the following ways:

  • Drafting the formal complaint that commences the lawsuit;
  • Interviewing witnesses under oath;
  • Submitting written interrogatories to the other side (and answering any interrogatories they might send to you); and
  • Examining pre-existing documents, physical evidence, etc., that is in the possession of the opposing party or a third party.

All this new evidence might provide your lawyer with the ammunition they need to pressure the opposing party into settling your claim. Remember that just because you file a lawsuit does not mean you will have to go to trial. The judge will probably set the trial date for several months after you first filed the formal complaint that initiated the lawsuit. You can settle your claim and withdraw your lawsuit at any time before trial or during the trial itself.

The Settlement Agreement

The settlement agreement is a written contract that formalizes the agreement between the two sides. You agree to drop your claim (and any lawsuit you may have filed), and the other side agrees to compensate you.

Both parties sign this document, which functions as a contract that allows you to take the opposing party to court if they fail to pay your compensation on time. Your lawyer should draft this document or review it carefully before signing it.

Consider Hiring a Lawyer

Insurance adjusters are usually very skilled negotiators because that is what they do for a living. Negotiation is also what most personal injury lawyers do for a living. One of the best uses for a personal injury lawyer is to handle negotiations for you because negotiation, more than any other process, is likely to result in a quick, generous settlement.

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