Is your personal injury client settling out of fear?

Redress After the Event Insurance (RATE)

What do you do when your client desperately needs money in a personal injury case? Do you settle early for a smaller amount right then and there even though you know they could have received a significant amount more over the course of their lifetime? It can be tempting to do so, when pressured by a client, but senior, experienced members of the plaintiff’s personal injury bar strongly advise against this course of action.

This is because, when urged to settle by a desperate clients, some lawyers may take what they can get from the insurer in a rush instead of taking the time to “work up” the accident benefits claim by engaging the expertise of medical practitioners.

Aside from not getting the personal injury client the highest amount of money possible, there are other consequences to doing this. An issue of LawPro magazine quotes Claims Counsel Specialist Cynthia Martin as saying, “And then the tort defendant, later in the day, will challenge the fact that they’ve compromised some of the benefits, because they’re going to try to stick them on the tort insurer.”

But why would a client ask to settle a case for a much smaller amount than they could have been entitled to? For some, the risk of being unsuccessful, especially the costs associated with this, is too high. The unsuccessful claimant will normally be required to pay the costs of the defendant, which can be very significant. This can become motivation for claimants to not pursue reasonable settlement.

Reassure personal injury clients with RATE

A Redress After the Event (RATE) Insurance policy protects clients against these costs and can provide the incentive a personal injury client needs to seek appropriate compensation rather than settle early on out of fear. It can give them the confidence they need to be successful in court.

Related: Preparing a personal injury client for the courtroom with confidence

A RATE policy can render certain strategies used by the defense less effective, because claimants will no longer be tempted to accept an “unreasonable” settlement because they fear not being successful.

For example, when a claim has little chance of success it is common for it is common for a defendant to make an offer to settle in exchange for a waiver of costs. In this case, there is no benefit to taking the offer over pursuing a larger settlement, money-wise. The only reason a client might accept this type of offer would be avoid adverse costs should they be unsuccessful after refusing the settlement offer.

With a Redress After the Insurance policy, which covers all adverse costs, including orders made after a refusal to settle, a defense strategy like this may be less effective. In fact, having a RATE policy may dissuade the defense from attempting a strategy like this in the first place.

Disclosing Redress After the Event Insurance in Court

Recently, Redress has had discussions with lawyers who indicate the defense has been asking if the plaintiff has insurance. These lawyers have indicated the presence of insurance makes a difference in discussions. Some say the defense has taken a position on a client’s case that they were going to seek costs, but upon finding out the client had insurance, the matter was dropped.

Making sure your personal injury client is protected with a Redress After the Event policy will help to ensure that they receive a fair and reasonable settlement and don’t feel desperate to settle early. 

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