Assessing settlement value

Before discussing settlement with a client or engaging in negotiation with the opposition, personal injury attorneys will typically prepare a spread sheet that reveals how much money the client would receive for different settlement amounts. The spreadsheet will take into account amounts that must be paid from the settlement figure for attorney fees and in satisfaction of outstanding medical and insurance liens.

In preparation for settlement negotiations, your personal injury attorney should initiate conversations with the subrogated insurance carriers and lienholders. These are the companies that have made payments for such things as medical bills, disability policies, worker’s compensation payments, case expenses, and car repairs. They have an interest in the outcome of the case because they will be paid from any award or settlement. In many cases, these parties bear some risk and/or expense in proceeding to trial, and thus, they are often willing to reduce their demands in exchange for the certainty of some payment.

The spreadsheet below is an example. It anticipates a series of offers from the defendant and counteroffers from the plaintiff. It shows what a plaintiff could expect to net from settlement in the amounts of $25,000, $31,000, $38,500, $45,000, and $50,000 after deductions for the plaintiff attorney’s 1/3 contingent fee and payments to satisfy medical bills owed to three different medical providers and reimbursement of the plaintiff’s medical insurer. The spreadsheet also shows that each of the medical providers and the insurer agreed to accept less than the full amount owed.