How Do Car Accident Settlements Work?

Car Accident Settlement

More than 78,000 people sustain injuries in traffic-related accidents in the Commonwealth each year—equaling around 214 injuries per day on Pennsylvania roadways. Pennsylvania law allows anyone injured in a crash caused by someone else’s negligent, reckless, or intentional actions to take legal action for damages within two years after the accident. The vast majority of these legal actions settle before reaching a trial.

In this blog post, we discuss how Pennsylvania car accident settlements work. For more detailed information about your rights to compensation after a car accident leaves you or a loved one injured, contact an experienced car accident attorney today.

Settlements Explained

A settlement is an agreement to resolve a legal dispute between an injured person on one hand, and an individual or entity legally liable for those injuries on the other. In a typical car accident settlement, the legally liable party agrees to pay money to the injured party, and in exchange, the injured party releases the legally liable party from future liability.

Most settlements bring a final end to a legal claim for damages. So, lawyers for injured car accident victims work hard to make sure the amount of the settlement meets the client’s financial needs as fully as possible. Once finalized, a settlement typically bars an injured victim from seeking more money later-on for the same car accident injuries.

Parties to a Settlement

A person who suffers injuries in a car accident generally has a legal claim for damages against anyone whose poor decisions or dangerous actions caused the accident and injuries. At the outset of a car accident case, experienced car accident injury attorneys work to identify those legally liable individuals or entities.

As a general matter, lawyers figure out who has a legal liability to an injured client by investigating the facts of an accident to determine:

  • Who owed a duty of care to the injured person in connection with the car accident? A duty of care is a legal and moral obligation not to act in ways that pose an unreasonable danger of putting someone else in harm’s way. People owe each other duties of care in a wide range of everyday circumstances. On the road, for instance, all drivers owe each other a duty of care not to drive recklessly or in a manner that puts others at risk for an accident. So, too, manufacturers of cars and car parts owe their customers a duty of care not to sell defective products that, if they fail, might cause an accident.
  • Who breached a duty of care in connection with the car accident? Simply put, lawyers investigate facts to figure out whose decisions or actions violated a duty of care to the injured accident victim. For instance, did another driver dangerously cut the victim off on the road? Did a mechanic mess-up a repair job on the brakes in the victim’s car, making them prone to failure? And so on.
  • Which breach caused the accident and the victim’s resulting injuries? Any persons or entities who committed breaches of duties of care that caused the accident and the victim’s injuries usually have a legal liability to the victim for damages.

Oftentimes, more than a single individual or entity may have breached duties of care to the victim in a way that caused a car accident. Each of them, therefore, might have a legal liability for damages. For instance:

  • Drivers of vehicles often have a legal liability for breaching duties of care by driving recklessly or carelessly.
  • Employers of drivers of commercial vehicles that get into car accidents may have a legal liability for breaching duties of care by hiring drivers with poor driving records, or for failing to train drivers effectively, or for requiring drivers to work in dangerous conditions.
  • Bars and restaurants can breach a duty of care and face a legal liability by furnishing alcohol to visibly intoxicated patrons who subsequently drive drunk and cause an accident.
  • Government agencies can face a legal liability for breaching a duty of care to motorists by failing to design, construct, and maintain safe roadways.
  • Manufacturers may breach a duty of care to the public by selling defective cars or car parts that fail under normal operating conditions and cause an accident.

Any person or entity with a legal liability to a car accident victim may end up as a party to a car accident settlement with that victim. Sometimes, victims may enter into multiple settlement agreements with multiple legally liable parties. Speak with a lawyer today about who might have a legal liability for your car accident injuries.

Settlement Amounts

Experienced car accident injury attorneys work to achieve a settlement that reflects the degree of harm the injured accident victim suffered. The dollar amount the attorney seeks generally reflects the victim’s expenses, the severity of the victim’s injuries, and the impacts that the injury has had on the victim’s life.

Car accident damages typically encompass two categories: economic damages (actual out-of-pocket expenses incurred due to the accident and the injuries the victim sustained) and non-economic damages (the negative impacts of the injuries on the victim’s life and well-being).

In seeking a settlement payment from a legally liable party, lawyers typically calculate economic damages to include:

  • Medical expenses, including transport by air or vehicle to the hospital, emergency services received both at the scene and in the emergency department, diagnostic testing, hospitalization, surgical services, medication, rehabilitation, and physical therapy.
  • The cost of repairing or replacing a vehicle damaged in the car accident.
  • The loss of wages a victim suffered due to being too injured to work.
  • The loss of future earning capacity if the injuries the victim suffered result in permanent disability.
  • Other accident or injury-related expenses, such as modifications made to a victim’s home to accommodate injuries, the purchase of mobility devices such as a wheelchair or crutches, or the cost of services to help the victim with day-to-day activities.

Lawyers also seek to assign a dollar-value to non-economic damages such as:

  • Mental and physical pain and suffering the car accident victim experienced.
  • The victim’s loss of enjoyment of life and damage to the victim’s close personal relationships.
  • Life difficulties resulting from the victim having sustained a disfiguring injury.

It is often difficult to place a dollar amount on non-economic damages. Some of the factors that an attorney may consider when determining the value of non-economic damages in a car accident case include:

  • The client’s age at the time of the injury.
  • The severity of the injury.
  • Whether the injury is permanent and the impact it has on the client’s ability to complete daily living and personal care tasks unassisted.
  • The duration of medical treatment needed to treat the injury and the physical pain associated with that treatment.
  • The level of physical pain and mental anguish associated with the type of injury the victim suffered.
  • The severity of the physical disfigurement the victim sustained in the accident.

Generally speaking, the more severe and long-lasting an injury, the higher the amount of money an attorney will seek as a settlement for the car accident victim.

There is no average settlement when it comes to a car accident personal injury case, however. Settlement amounts depend on the factors above and on the financial resources available to pay them.

In other words, as a practical matter, the amount a legally liable party has the ability to pay, either through insurance or with the party’s own assets, can—to some extent—limit the size of a settlement. Just as you can’t get blood from a stone, even the most experienced attorneys cannot recover money from someone who lacks any ability to pay it. That is why it is important to hire an experienced car accident attorney who can dig into the facts of an accident to identify every party with a potential liability. The more parties with liability, the better the odds of sufficient financial resources existing to pay a full-value settlement.

Settlement Negotiation

Once an attorney has identified parties with a potential legal liability for a car accident, and the amount to seek as damages for an injured client, the attorney will typically take some action to demand payment. Oftentimes, the attorney sends a demand letter to the legally liable parties, their attorneys, or their insurers. Sometimes, instead of making a demand that way, the attorney might opt to file a lawsuit in Pennsylvania court. Or, the attorney may take both actions at once.

One way or another, however, the attorney announces the injured client’s claim for damages against the legally liable party or parties. In most car accident cases, this opens a negotiation with the other parties’ legal and/or insurance representatives about two broad topics: (1) whether or not they agree their client has a legal liability for the car accident; and (2) if so, how much money their client should, and can, pay in damages. Commonly, this dialogue happens in parallel with discovery in a legal action—the pre-trial process in which opposing parties in a court case investigate each other’s claims and defenses.

The attorney for the car accident victim aims in these negotiations to convince the legally liable party to agree to settle the case for the maximum dollar amount. Obviously, representatives for the legally liable party tries to minimize their clients’ financial exposure. Through a back-and-forth, directly or sometimes facilitated by a mediator, the parties work to find a middle ground that pays the victim a fair and reasonable settlement amount, and releases the legally liable party from future liability.

Settlement Process Timeline

Just as there is no average settlement in a car accident case, there is no average length of time that reaching a settlement takes.

gabriel levin Attorney

Gabriel Levin, Car Accident Attorney

The process can last anywhere from a couple of months to a few years, depending on:

  • The time it takes to determine liability and to gather evidence to prove liability.
  • The extent of the victim’s injuries and the expected length of treatment. Sometimes determining a fair settlement amount requires waiting until doctors have a clear view of the injured accident victim’s future medical needs (and the costs associated with them).
  • How soon an insurance company for a legally liable party responds to a claim, and how willing that party is to enter into negotiations in good faith.
  • The injured accident victim’s willingness and ability to let the negotiation process play out at its own pace, rather than pushing for a speedy resolution.

Lawyers have a duty to report any settlement offers made during negotiations to their clients. In all cases, the decision to accept or reject a settlement offer belongs to the client, and the client alone. Experienced car accident injury attorneys advise clients about the merits of a settlement offer, and may offer their own opinion about whether or not the client should take it, but in the end, the client always decides.

Seek Experienced Legal Assistance

If you were injured in a car accident caused by someone else’s careless, reckless, or intentional actions, contact an experienced car accident injury attorney for a free case consultation.

The Levin Firm
1500 John F. Kennedy Blvd,
Two Penn Center, Suite 620
Philadelphia, PA 19102
215-825-5183