Money | Real Life

How Are Personal Injury Settlements Determined?

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Unless you’re an attorney yourself, the legal system can be a confusing place to navigate. It’s not always obvious to the layperson just how much goes into the final decision of a court case.

When determining the amount of a personal injury settlement, for instance, a number of factors come into play, ranging from a person’s medical bills and physical therapy expenses to their personal injury lawyer’s representation fees.

Factors That Can Increase Your Settlement Amount

Medical expenses – In a personal injury case, the clearest way of demonstrating the impact an injury has had on a person is via a thorough record of all medical expenses directly pertaining to that injury. This includes doctor bills, emergency room fees, hospital room fees, lab/testing costs, surgery costs, medication costs, and even the expense of being transported in an ambulance. In most personal injury cases, medical expenses are the biggest factor in determining the settlement amount.

Lost income – Expensive medical care isn’t the only way an injury can wreak havoc on a person’s finances. If the injury is severe enough, it could limit a person’s ability to do their job, either temporarily or permanently. Missed work translates to lost income; if a person can successfully demonstrate that an injury suffered due to someone else’s negligence has negatively impacted their wages, their settlement amount is likely to increase as means of reimbursement.

Physical therapy – While some injuries ultimately heal with little to no long-lasting aftereffects, other injuries can take months or even years to fully recover from. Physical therapy can help a person rehabilitate or adapt to physical deficiencies or disabilities caused by an injury, usually over the course of many treatment sessions. Such sessions can be pricey, though. If physical therapy is indeed required, the estimated cost and number of the sessions will often be factored into the settlement.

Damaged property – In certain personal injury claims an injured person can also claim damages to their physical property when seeking compensation. This is particularly common in personal injury cases involving traffic accidents, wherein a person’s automobile can end up requiring major repairs or even total replacement. Before such expenses can be included in the final settlement amount, however, it has to be shown that such property damages were not preexisting.

car accident collision

Factors That Can Decrease Your Settlement Amount

Shared fault – The worst thing that can happen for a person pursuing a personal injury case is for the court to find the defendant faultless in the incident leading to the injury. Even if a defendant is found at fault, though, that isn’t the end of the story. “Shared fault” is when a court determines that both parties were, to some degree, responsible. The amount of fault a person has for their own injury directly impacts the amount they can receive via settlement.

Insufficient evidence – As noted above, there is always the danger in a personal injury case of not being able to convince a court that the defendant is at fault for the incident in question. That’s why it’s important for the injured person to be able to provide as much evidence as possible, not only evidence of the extent that the injury has affected their life but also evidence of the defendant’s negligence. Additionally, a defendant can provide their own conflicting evidence to hinder the case against them.

Medical liens – Even if a defendant is found to be solely at fault for a person’s injury, not all the money their settlement includes may actually go to them. Many people can’t afford the cost of treatment for an injury without the help of health insurance. In such cases, the person’s insurance company might put a lien on a personal injury settlement, entitling them to a portion of the settlement money to reimburse the cost of those medical expenses.

Attorney fees – Like medical liens, attorney fees don’t reduce the actual amount of a person’s settlement, but they do reduce the amount they ultimately receive from that settlement. In most cases, a lawyer and the individual they represent will sign an agreement specifying that the attorney will receive a certain percentage of the settlement as compensation for their work. Although this could seem like money lost, a good lawyer’s services are often invaluable when pursuing a claim.

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