A personal injury claim can prove challenging for most people trying to get compensation, more so after an injury due to an accident.
This is why victims need to understand how these settlements are reached to be able to claim the justice they rightfully deserve.
Settlement calculation in respect of personal injury cases is usually performed taking into account a wide range of parameters. These include health care costs, lost income, physical and mental suffering, and so on.
We’ll look at various components contributing to calculating these settlements and provide insights into how insurance companies and legal professionals assess claims.
Understanding Personal Injury Settlements
Before moving onto it, it will be worthwhile to understand first what settlements or personal injury looks like.
For instance, should an injury occur to a person who is not at fault, he/she may seek to settle his/her claims for losses, medical expenses incurred, lost earnings, pain and suffering, etc.
This is called restoration, which involves bringing the aggrieved party back as far as reasonably possible, and in more ways than one, to how they were prior to sustaining the injury.
What Is the Formula for Personal Injury Settlements?
The formula for determining the settlement amount is easy, but certain factors must be considered as one works through the formula.
To determine your compensation, personal injury attorneys often multiply your special damages by a general damages multiplier.
Therefore, hiring a personal injury attorney to help assess your claim and accurately determine your special and general damages is good.
Most importantly, to ensure you lodge your personal injury claim on time in Kentucky. And most importantly, to ensure that you file your personal injury claim in time in Kentucky.
Special Damages
Special damages, also known as economic damages, are quantifiable expenses resulting from the injury, which include:
- Medical bills
- Property damage
- Lost income
- Hospital bills
- Extended medical treatment (e.g., physical therapy)
- Medications prescribed due to the injury
- Future income if unable to work
- Future medical bills, even if speculative
Arriving at your special damages total may take time, especially with complex injuries.
General Damages
General damages encompass non-economic losses, such as:
- Pain and suffering
- Disruption to daily routine
- Stress-related to the incident
- Worry about future implications
- Loss of consortium
General Damages Multiplier
The general damages multiplier, often called GDM, is used in this case to estimate pain and suffering.
Usually ranging from 1.5 to 5, this multiplier depends on the degree of the injuries sustained.
The more significant the pain and long-term effects, the higher the multiplier applied to your special damages.
What Are the Lawyers Fees in Your Personal Injury Case?
In most personal injury claims, the attorneys undertake the case on a retainer agreement of “contingent fee.” This means that the lawyer’s payment will depend upon the winning award of the case of settlement without going to court.
This fee is usually 33% to 40% of the amount compensated for her efforts.
You won’t pay if you lose, but you will be liable for some costs and expenses related to the trial case.
When a retainer agreement includes costs as part of the lawyer’s fee, establish whether the costs will be deducted before or after the fee is calculated.
You can negotiate the percentage based on the complexity of your case or if you’ve already gathered the necessary documents.
Factors Influencing Settlement Amounts
The settlement amount can be one of the most critical components in legal disputes. Various personal, legal, and socio-economic reasons shape the amount the parties finally settle for.
These factors are therefore important to the plaintiff as they seek to get reasonable compensation where due and to the defendant as they wish to assess the extent of their potential exposure.
1. Nature of the Injury or Damage
It is often assumed that injury or damage is the most important factor of the parties to the settlement negotiations.
Physical therapy will attract a higher settlement amount for catastrophic injuries and those that require serious medical attention.
Also, damages due to losses or physical damages also factor in.
Thus, the more significant and long-lasting the impact, the more substantial the financial compensation likely to be awarded.
2. Impact on Quality of Life
The extent to which an injury affects an individual’s quality of life can substantially influence settlement amounts.
Some parameters include daily activities, employment, and overall physical and psychological status.
Both courts and insurers are likely to increase damages where there are considerable changes in the injured party’s living standard, particularly emotional stress, and other long-term damage.
3. Medical Expenses
Medical expenses often account for large parts of any compensation that could be reached in a settlement.
These are out-of-pocket expenses, which are initial ones that may include hospital bills, emergency care, and future medical care or therapy and rehabilitation that may be incurred in due time.
Health income insurers must review all medical documents with legal representatives to determine what has been spent on pain management.
Hence, supporting documents that substantiate that such expense has occurred can, to some extent, aid in obtaining a settlement that is to their advantage.
4. Pain and Suffering
This term refers to the physical and emotional distress experienced due to an injury or incident.
Factors such as duration, intensity, and the impact of pain on daily life are evaluated to assign a monetary value.
It can often be subjective, so experienced negotiators emphasize documenting evidence through testimonies, psychological evaluations, and other means to justify the claim.
5. Liability and Fault
Liability is one of the significant factors ascertained during negotiation regarding the amounts of settlement claims.
If there is more evidence of the respondent’s fault, the plaintiff’s claims for settlement will have a better chance of success.
Higher compensation levels may be expected from respondents who are the only respondents, and it is their fault.
It might turn the other way. If and when liability or negligence divides or is inconclusive, a settlement amount higher than the settlement amount will not be offered.
6. Insurance Coverage
The type and extent of insurance coverage available can greatly influence the settlement amount.
Claimants may have greater leverage in negotiations in situations where ample insurance exists. Conversely, if the defendant has limited coverage, it might restrict the compensation the injured party can expect.
Thus, understanding the insurance landscape and the policy limits is essential for both parties when approaching settlement discussions.
7. Strength of Evidence
The strength of the evidence in a particular case greatly influences settlement estimation. Evidence substantiating the plaintiff’s position, such as clinic files, witness statements, and forensic evidence, increases the chances of a good settlement.
On the other hand, inadequate or non-appealing evidence may affect a claimant’s leverage during negotiations, which may, in turn, lead to fewer offers.
Each party must develop and adduce persuasive evidence that will likely sway the jury and other stakeholders.
8. Legal Representation
Settlements achieved by experienced attorneys are more satisfactory because they are equipped with adequate knowledge of legal arguments, including the negotiation process.
Experienced advocates fully appreciate the relevant legal particulars, work to outsmart the adversary, and are competent in advocating for their clients’ needs.
Thus, choosing the right legal representation is vital in achieving a satisfactory settlement.
Conclusion
Understanding the formula for personal injury settlements can empower you to seek the compensation you deserve.
While various factors contribute to the ultimate settlement amount, knowing how these components interact allows for informed discussions with legal counsel.
Like anything in law, the nuances can be complex, but having a clear outline of the factors involved can lead to a more effective pursuit of justice.
