Why it Takes Time to Settle a Personal Injury Lawsuit?

Clients often want money in-hand as soon as possible after an accident. However, it can take time to settle a personal injury lawsuit. Here’s why.

**INSURANCE COMPANY RESISTANCE**

Insurance companies will do anything they can to protect their profits and bottom line. This includes engaging in some questionable and manipulative tactics when they receive a claim. It’s common for insurers to delay claim processing, extend unreasonably low offers, and use fear to intimidate claimants. These tactics are designed to drive accident victims to accept early offers for much than their claims are worth. Rather than cutting to the chase and candidly reviewing claims, insurance companies waste time by engaging in these games.

**DISPUTES OVER LIABILITY**

Negotiation settlements can stall if there is a dispute over liability. Insurance companies will refuse to approve a claim if there is any evidence to suggest that their insured client is not at fault. Investigations may be necessary to resolve these disputes. This can take time and extend the amount of time it takes to settle a lawsuit.

**SHARED FAULT**

Disputes over liability aren’t always black and white. Many times, there is evidence to show that more than one person is to blame. Sometimes an accident victim contributes to his or her own injuries. This shared fault can impact lawsuit settlement negotiations. Many states, including California, do not prevent accident victims from recovering compensation. However, the victim’s compensation will be reduced. The more fault you share, the less money you’ll be able to recover. Determining just how much of an accident was caused by each party can be time-consuming and contentious. This can delay settlement negotiations and extend the amount of time accident victims go without compensation.

**INJURY**

Most personal injury lawsuit plaintiffs are encouraged to hold off on filing or settling a claim until they’ve recovered from their injuries. It’s hard to properly project, identify, and value damages, such as medical bills or the ability to work, until this recovery happens. Recovering from an injury can take time. Waiting to recover can extend the amount of time it takes the settle a personal injury lawsuit. However, plaintiffs who are patient are usually rewarded with higher settlements.

The short answers (followed by the long answers):

1. Cases should not be settled until injured person has completed all treatment or has a recommendation about future treatment that will be necessary–treatment may last months depending on the nature of the injury unless it is clear that treatment will exceed policy limits (example, a wrongful death case involving a child where there is only $25,000 of available insurance–it is generally accepted that the damages will more likely than not exceed to $25,000 limits).
2. The longer the insurance company hold on to money, the more money they are able to make off of it (they have large sums of money that are likely earning interest–the more they have the more interest they are able to earn) –this is just based on general knowledge a insurance or finance expert may be a better source for this reasoning.
3. Sometimes clients may delay the process by not being treated as scheduled (so it takes longer)
4. Delays from treatment providers and insurance companies
5. Waiting periods that are required by law

1. Cases should not be settled until injured person has completed all treatment or has a recommendation about future treatment that will be necessary–treatment may last months depending on the nature of the injury.

The majority of the damages (when I say damages I’m referring to what a person who has been injured has lost whether the damages are economic [e.g. incurred medical bills as a result of treatment for the injuries suffered so they have lost that money] or non-economic [e.g. pain and suffering or the inability to enjoy life to the extent that one was able to enjoy it prior to the injuries–for example a dad who coached his son’s soccer team may not be able to continue coaching as a result of the injuries he suffered–that’s a loss even though there is not a clear number that we are able to assign to the value of that loss as compared to medical bills]) are contingent upon the type of injury and treatment that is necessary. As a result, those who have suffered personal injury will most likely need to complete treatment before we know how much that treatment costs.

In the case of soft tissue injuries (strained or torn ligaments or muscles–think whiplash or herniated discs in spine which may be very painful), after an initial visit to the emergency room or primary care physician the injured person may be referred to a chiropractor, orthopedist, or physical therapist. These treatment providers will asses the injured person to determine if treatment will ease pain or whether anything may be done to treat the injury. Usually conservative treatment lasts about 4 to 6 weeks. Depending on the injury the treatment may be longer; and in some instances the injured person will continue to experience the effects of the injuries despite treatment; there is nothing else that may be medically done to improve the condition.

A personal injury attorney will want to ensure that the injured client has received all of the medically necessary treatment before moving forward with a settlement proposal because he or she will want to include the costs of those treatments in the demand for payment. For example, if a personal injury client needed 8 weeks of treatment, the personal injury attorney would not want to attempt to settle the claim after 3 weeks because the costs for the remaining 5 weeks have not been incurred and they personal injury client will not usually be able to have the insurance company pay for this type of treatment in advance.

Additionally, suppose that at the 6 week mark the treatment provider, noticing that the patient/personal injury client is not improving as he or she had hoped, orders an MRI and that uncovers additional damage that was not known before. Had the personal injury attorney settled the case prior to this discovery the personal injury client would not be able to demand payment for those services and perhaps additional treatment.

As for non-economic damages, the pain that might be experienced from whiplash is generally not as intense, permeating, or long-term as the pain experienced as a result of a herniated disc. As a result, the demand for payment for pain and suffering may increase or decrease on the level of pain that is agreed upon and understood depending on the extent of injury.

This is a good time to bring up the release. When an injured person settles with an insurance company he or she is generally required to sign a legally binding document, called a release (there are different types), that forbids the injured person from ever seeking damages from the insurance company, its insured, the driver, and whomever else is named caused by the injures ever again; this includes claims both known and unknown.

So, in the example I gave above, if a injured person accepted a settlement based on an initial diagnosis of whiplash (whether it was a result of incomplete treatment or misdiagnosis) where total of medical bills were $2,500 and pain and suffering was valued at $1,000, he or she would be required to sign a release in exchange for the settlement money totaling $3,500. If 2 days or 2 months from that time he or she learned that they in fact had a herniated disc as a result of the injury that they needed surgery and that the surgery would cost between $20,000 and $50,000 and cause the injured person to be off work for 4 weeks, and also require an additional 4 weeks of physical therapy after the surgery–they would be legally barred (generally, and this is assuming there are no issues that might be raised about the release, etc.–one can always challenge these things and the law is constantly evolving–this example is based on general, common scenarios exceptions may always exist depending on the facts and circumstances of individual cases) from receiving additional money from the insurance company, the insured, or anyone else named in the release. You essentially get one bite at the apple, you want to make sure that you know as much as you can so that you may properly evaluate the value of your case.

2. The longer the insurance company hold on to money, the more money they are able to make off of it (they have large sums of money that are likely earning interest–the more they have the more interest they are able to earn).

This is just based on economic reasoning; I am not assuming that insurance companies make decisions based on this factor, but it is a factor. This is also something that may better be analyzed by an insurance or banking professional, but based on general knowledge I can say that some insurance companies may invest a portion of the premiums it receives or place them in other interest bearing accounts. Due to the large amount of money these accounts or investments may contain the longer the insurance company is able to keep money in these accounts the more interest or investment income they can make–it may make more business sense for them to delay paying for a few weeks than to pay our immediately.

3. Sometimes clients may delay the process by not being treated as scheduled (so it takes longer) or healthcare providers might delay in approving certain treatment.

Missed and/or rescheduled treatment appointments may cause treatment to take longer and delay ability to move forward (see 1) as a result. This is especially true when treatment includes appointments with specialists or providers who may have long wait times.  Additionally, some health insurance providers may require per-approval (of course the length of the delay may vary depending on health insurance provider) for certain treatments thereby delaying an injured person’s ability to be treated and ultimately delaying settlement.

4. Delays in receiving bills and records from treatment providers and other sources of economic loss.

As part of determining the economic losses an injured person has incurred, the attorney needs to gather all bills and records that are related to treatment for the injury. This involves requesting bills and records from the Emergency room (if the person went to the emergency room), the doctor who treated the injured person (this is usually a separate bill because the ER doctors are not usually employees of the hospital–they have their own practice groups), the radiologist (same as with doctors), the primary care physician (if treated by PCP), the ambulance (if transported), the specialist (chiropractor, orthopedist, surgeon, anesthesiologist,  physical therapist, etc.), etc.

While turn around times vary, it can usually take between 7 and 20 days to receive records and bills and can take even longer because some providers outsource this function to 3rd party companies. There is also human error, requests get lost or sent to the wrong department, sometimes they are not processed correctly and though the attorney receives bills and records they may not be what was requested, and so another request–taking more time–may be required. As it relates to claims for lost wages, there may be delays from employers in providing requested wage and salary information needed to properly value a loss wages claim.

5. Waiting periods that are required by law.

In Georgia, insurance companies have a certain amount of time to respond to some inquiries and/or requests. For instance, the law allows someone who has been involved in a car accident to request certain information about the insurance policy of the driver of the other vehicle, and his or her own insurance. However, the law gives the insurance company 30 days to comply with this request–in my experience, however, the insurance companies provide this information quickly and well within the 30 days.

There are other laws that apply to personal injury cases which also include a specified time periods for action and/or reply, thus the attorney who is requesting the action or reply will need to allow at least the time provided in the statute for compliance.

I hope this helps–personal injury cases can be complicated and involve the coordination of many different people (attorneys, health care providers, billing and record providers, health insurance companies, claims adjusters, clients and at-fault parties). As noted above, the information provided is general, and each case is different and must be evaluated independently paying attention to the facts and circumstances of that particular case.

The reason it takes time to resolve a personal injury lawsuit can vary. Normally, it is not appropriate to settle a lawsuit before the extent and cost of the injuries are apparent. Many times, the future medical expenses will not be known at the beginning, or midway point of the recovery process. It would not be proper to settle a lawsuit before you know the extent of the injuries. If you settle a case too soon, you can leave your client in a vulnerable potion later on if the recovery does not go smooth and future medical expenses are accrued.

Some matters don’t take very long to settle.  If liability is clear and the victim’s injuries and damages are more significant than the available liability insurance, the claim tends to resolve very quickly.  Even if the damages are not more significant than the insurance policy limits, the claim tends to resolve more quickly if there are not issues that are vigorously disputed, such as the value of the claim.

However, if liability is an issue, meaning the party against whom the claim is brought contests that they were negligent, it can slow down the process.  That person has a right to present evidence that he or she was not a fault.  This evidence effects the value of the claim, and can interfere with reaching a resolution.  Similarly, if the injury is disputed, or the severity is disputed or the cause is disputed, it also can slow down the resolution process.

The key is to present a claim in a fair manner, without overreach.  Also, it is important to have “evidence” to support your claim that another party was negligent and to support the severity of your injury and damages as well.  This can come in the form of accident witness statements or photographic evidence.  Your injury(ies) can be supported by medical records and physician testimony.  If the supporting evidence is there, it often drastically speeds of the resolution.

Finally, even when a matter resolves, often the victim needs to address claims by health care providers and health insurers who may have a right to be paid back.  This process can take additional time.