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In my last post, I raised a hypothetical situation as a way to discuss a lawsuit settlement more spcifically. This week, let's move five months down the road and get into the negotiating process.

We know now that:

  • The surgery went well and Jane was very dedicated to her therapy.
  • Her surgeon has said that her injury has resulted in an 8% permanent physical impairment to her body as a whole.
  • Her medical bills, including physical therapy and surgery, total $14,000.
  • Fortunately, her doctor and physical therapist agreed to be paid out of any settlement or jury verdict.
  • Even so, she still has days where she is bedridden because she overdid it in the days previous.
  • Jane has been back at work, but can only work four days, not five.
  • Even after cutting expenses everywhere possible, the family has rung up $6,000 in credit card bills for living expenses.
  • Jane's estimated lost earnings as of now total $12,000. This includes four months of no earnings ($10,000) and two months of earnings at 80% of her pre-injury rate ($1,000). Thus, her future lost earnings will be about $6,000 per year.

The insurance carrier has been kept in the loop by our office with updated medical bills and records. The private investigator that we hired did a background check on the delivery driver and he has a clean driving record. Jane is in the office and wants to know what all of this information means as far as settlement. Jane is 40, so her reasonable work expectancy is another 25 years. That is $150,000 in future lost wages, though that needs to be reduced to present value, whicxh we estimate to be about $60,000. Her medical bills and past lost wages are givens – $14,000 and $12,000. Her total "special damages" total $86,000. She also has a permanent injury.

At the same time that we are evaluating the case, so is the delivery company's insurance carrier. Based on experience, we know that the carrier will not pay more than 50% to 65% of what they evaluate a probable jury verdict range to be. We evaluate that a jury would return a verdict if this case were tried in a range of $275,000 to $450,000. This is based on several factors:

  • her "special damages" of $86,000;
  • Her permanent injury rating;
  • The fact that we believe that a jury will like her and understand what she has gone through and will continue to go through:
  • The delivery driver's clean driving record; and
  • The county where her case would be tried.

Based on all of those factors, we have asked that Jane aouthorize us to make an opening demand of $550,000, which she did. In my next post, we will discuss why a demand in that amount was made and walk through the settlement negotiations.

Part One
Part Two

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