Oct 16

Insurance Payouts for Neck Injuries in U.S.

Personal injury awards are governed by the law of Negligence, which always includes several basic elements—Duty, Breach, Causation and Damages—but one cannot look to a national set of awards to determine what an appropriate range of damages might be for a specific case.  This is due to the fact that stare decisis, the common law principle that every case is determined by the law developed from  cases that preceded it, requires a judge to give greater deference to a decision from his or her own state than one from a different state.

Even that explanation ignores the fact that most personal injury awards made at trial in the U.S. are determined by a jury.  Still, one must look to other personal injury awards in the state and in the particular county in which the case will be tried to determine the appropriate range of damages.

Jurors from King County, Washington (Seattle) may have a completely different set of values than jurors from Riverside County, California (Palm Springs) or even from Whatcom County, Washington (Bellingham).  Such factors as age, level of education, job, political bent, the economy, one’s own unique personal circumstances, and many other factors all contribute to the range of potential damages awarded for “pain and suffering”.  Different lawyers’ abilities to tell their clients’ stories also contribute to this range.

How does one determine which county the case is likely to be tried in?  The laws of “Personal Jurisdiction” and “Venue” require that the lawsuit be started in either the county where the accident occurred or the county in which the defendant resides.  However, if started in the county where the defendant resides, the defendant could apply to the court to have the litigation transferred to the county where the accident occurred, particularly if that would be more convenient to the non-interested witnesses involved in the case (eyewitnesses to the accident, medical personnel on the scene, ER doctors and nurses).

In Washington State, one useful tool for attorneys is a publication called “Jury Verdicts Northwest”, which lists trial awards and settlements by type of injury, state and county, and even principal lawyers and experts.  Determining appropriate settlement amounts for a particular injury is then more of an “art” than a “science”, as there are many factors that influence a settlement.  First and foremost, as discussed in our blog entry of April 2, 2009 (Colossus Adjusting Software), is the type of adjusting software the defendant’s insurance company is using to evaluate the case.  For many insurers, the claims representative can do little more than plug your data into the computer and wait for the Wizard to tell him or her how much to offer.  Where the adjuster may have more discretion, there are other factors which will influence the size of the offer.

One of these factors is whether the injured party is represented by a lawyer in the jurisdiction in which the accident occurred.  In other words, if the case cannot be settled, is the party able to advance a lawsuit in the courts?  If not, then the insurance adjuster has been given no incentive to increase the size of the offer.

Let’s face it, no one wants to go to trial. (Personally, I love to be in a courtroom, but even I recognize the value of a sure settlement for reasonable value over the risk of a protracted lawsuit where a party’s fate may be sealed by a jury who cannot understand or appreciate the injuries and disabilities sustained).  But sometimes, a defendant’s insurance company will offer so little to settle that no one would choose settlement over trial.  If a defendant or his insurer truly wishes to avoid trial, they’ll consider the likely result at trial and then determine the amount that would persuade a party to forego that opportunity.  Unless a person is represented by able counsel in the jurisdiction, then there’s no potential jury award even to provide a threat to the insurance company.

I try to keep track of the amounts of the last settlement offer received before trial and the ultimate jury verdict we have received (US cases only), excluding economic damages that are specific to the facts of each particular case (e.g., future wage loss depends on how much the person was earning and how much they’re unable to work in the future).  In our experience, the verdict exceeds the offer by an average of 425%.  The following chart is illustrative, and does not even represent the most egregious differences between offer and verdict.

Offer………..Jury Verdict
$100,000….$737,500
$125,000….$1,145,000
$3,000……..$101,000
$40,000……$135,000

My best advice to a person negotiating a personal injury settlement with an insurance adjuster?—ask a lawyer to review the settlement.  Many personal  injury lawyers are willing to sit down for a free half-hour consultation, and many work on contingency, where the fee is a percentage of the recovery.  I frequently entertain arrangements with clients whereby I will take half of any amount I receive for them in excess of their offer, up to a maximum of 1/3 of the total recovery.  In most cases, the ultimate attorney’s fee I charge is 1/3, meaning that the amount that the insurance adjuster offered them before they had a lawyer was less than 1/3 of the true settlement value.

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