PERSONAL INJURY CLAIMS: PRE-SUIT NEGOTIATION

The first phase of handling a personal injury claim usually involves pre-suit negotiation. Negotiation can occur with or without the assistance of counsel. Frankly, it will be more effective if counsel is employed. For purposes of this article, we will assume that counsel has been hired. What takes place in this pre-suit phase of activity?

Some industry explanation is helpful as backgound. Most personal injury claimants seek to recover insurance proceeds. When insurance coverage exists for a loss it is a readily available source of compensation. Insurers have a duty to consider demands made by claimants in good faith and to pay claims with merit in order to protect their insured's interests. There are severe penalties for insurers who act in bad faith, so insurers are usually responsive to claims. Responsive does not mean that they are generous or even reasonable. To the contrary, insurers typically try to avoid a claim altogether. When it is apparent that a claim must be paid in order to be resolved, insurers try to pay as little as possible. Some insurers are better than others. Consumer rating services can help identify the better carriers, meaning those that tend to evaluate and pay claims in a reasonable fashion and not drag their insured's through litigation without good reason to do so.

Insurers, like any rational party defending a claim, require that the claim be documented. This means that a claimant needs to provide documentation (i.e. evidence) to substantiate the claims being asserted. For example, in an auto collision case the documents would include an Accident Report, documents showing the disposition of any traffic citation, medical treatment records of the claimant, documents from an employer to confirm a lost wage claim, photographs and so on. The quality of the claim documentation will determine the value of the claim to some degree. If a claim is not persuasively documented, it is not likely to be paid.

During pre-suit negotiation attorneys will assemble pertinent documentation and provide it to the insurer. The documentation is accompanied by a demand letter from the attorney. The demand letter will identify the legal grounds for the claim asserted and the amount sought as compensation, usually with a time limit (e.g. 30 days) for the insurer to respond, failing which the filing of a lawsuit is threatened. The demand is invariably too high. The insurer will respond with an offer which is invariably too low. The parties will make counter-proposals and a settlement may be agreed upon through negotiation. This process can be an effective and efficient way to get a claim resolved.

Demand packages can be very elaborate. Some may include bound booklets with indexes of all the information needed to evaluate a claim. In catastrophic cases, videotape or multi-media presentations may be prepared when the insurer expresses a willingness to meet and consider such materials.

When pre-suit negotiation fails, the claimant has little choice but to file a lawsuit. Suit must be filed within the statute of limitations or the claim will be lost. The statute of limitations can vary depending upon the type of claim asserted, but it is usually two years for injury claims in Georgia. (Don't rely on this article for what the applicable statute of limitations is in your case - seek counsel).

Some cases may not be amenable to pre-suit negotiation. Medical malpractice cases, where liability is often vigorously disputed, are often filed without attempting negotiation. Your counsel may have good reasons for not attempting pre-suit negotiation, but clients should get an explanation about the strategy being employed.

Next up - a short series on Understanding Personal Injury Litigation.

Copyright 2004 by Schulten Ward & Turner, LLP. All rights reserved. For more information call David Turner at (404)688-6800 or e-mail dlt@swtlaw.com.

THIS ARTICLE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. FOR ADVICE ABOUT YOUR SPECIFIC LEGAL NEEDS CONTACT COUNSEL OF YOUR CHOOSING.