More Factors Involved in Increasing Value of a Personal Injury Lawsuit

Holding Out for a Better Settlement

The willingness you and your attorney have for holding out for top dollar is another important factor. Insurance companies always start with a relatively low offer and work their way up. Your attorney is ethically required to report each and every offer to you. If your attorney is experienced, he or she will tell you if the first offer is too low and ask you to be patient. This patience almost always pays off. The insurance company inevitably increases the offer if they are convinced that you cannot be bought off cheaply. Generally speaking, the longer you hold out, the higher the offer goes. Every case has its limit, though. If your lawyer has litigation savvy, he or she will settle when the offer reaches that limit.

Example: Jack invited his neighbor, John, over for dinner. John slipped on a patch of ice while walking up Jack’s front steps and he fell down the steps. Jack knew the ice was there, but since the front porch light was off, John was completely unaware of the danger.

John is 42 years old, lives alone in a large urban city, has had no major prior medical problems, and works as a truck loader for a furniture company. Due to the fall, John herniated one disc, which impinges on the spinal cord, sprained his ankle, and required noninvasive back surgery. The ankle healed completely after three months of physical therapy.

The doctor told him that he could not be on his feet, drive a truck, or lift anything until a month after the back surgery, and nothing over 50 pounds for three years. In addition, he will not be able to do major lifting for a full workday for the rest of his life, and occasionally, he will experience low back pain and spasms.

John had established a solid earnings history as a truck driver during his twenty years in that job. He earned $45,000 in the year before the accident. His income was increasing at an average rate of 5% each year. He did not lose any health or retirement benefits because of the accident.

Ultimately, John was out of work completely for two months, returned to light duty for the ensuing three years, and then modified full duty thereafter. His earnings for light duty started at $35,000 per year with 5% increases each year. His modified full duty pay was initially $5,000 less than he would have received but for the accident, with 5% increases each year. He planned to work to his retirement age of 65.

A good settlement for John could be calculated as follows:

Herniated disc = $60,000
Back surgery = 50,000
Sprained ankle = 5,000
Loss of past earnings = 7,500
Loss of future earning capacity (first 3 years) = 30,000
Loss of future earning capacity (rest of his life) = 85,000
SUBTOTAL = $237,500
Minus legal costs = 3,500
Minus attorney’s fees = 78,000
GRAND TOTAL = $156,000


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