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Placing a Monetary Value on an Injury
By Evan Aidman
Some people object to the very concept of compensating injured accident victims with money. They might feel that individuals who have been injured should simply be strong and bear their losses. After all, their no-fault insurance should cover their medical bills and lost wages. It is a good bet that these people have never been seriously injured in an accident. Nor is it likely that anyone in their family has suffered such a fate. Nevertheless, it is fair to debate the issue of directly translating pain into dollars.
Still others point to the added costs of doing business they feel that injury lawsuits cause. They believe that these added costs are passed on to the consumer in the form of higher prices. There is some merit to this argument. I believe it is worth paying these higher prices in exchange for keeping the right to sue for compensation. Not only can financial compensation help to make the accident victim whole, but the threat of lawsuits keeps companies accountable for their errors. Consider also that The Bible at Exodus 21:25 authorizes financial compensation for pain inflicted by another.
Pending further changes to our present set of negligence laws, individuals are free to look to the courts for financial compensation for injuries caused by the negligent acts of others. Given that this system, or some form of it, is likely to remain in effect for many years to come, the questions becomes: How much is an injury case worth? Unfortunately, there is no way to know for sure what a case might settle for until the medical treatment is concluded and the doctorís prognosis rendered.
Unless he has been in many accidents and sued many times, the average client has no idea of the amount for which a personal injury case should settle. The clientís fate, for all intents and purposes, is in the hands of the attorney. If the attorney, for whatever reason, wants to settle the case even though fair value has not been offered, how is the client to know this? There are no easy answers here, which is why it is vital to retain a lawyer you can trust. I know of no other area of life, with the possible exceptions of going to your doctor or getting your car repaired, where the unsophisticated client has to trust the honesty and good judgment of another.
Lawyers and insurance adjusters evaluate personal injury cases in many ways. For simple cases, such as neck and back strains and sprains (soft tissue injuries) that heal over time, the key factors will be length of treatment and, perhaps, the amount of the medical bills. Some adjusters and lawyers just multiply the total of the medical bills by three or four to determine the settlement value. That is an overly simplistic approach which is used less these days than in the past. Yet the medical bills still figure into the settlement evaluations in this kind of injury case. The bills are also considered to a lesser extent in more serious injury cases.
Perhaps the one rule of thumb for these "soft tissue injury" cases is $2,000 for each month of treatment. Thus, a soft tissue back and neck injury with three months of treatment will probably settle for between $5,000 and $7,000. There is a limit to this kind of computation. After perhaps 6 or 7 months of treatment, the insurance company may begin to suspect that the claimant is prolonging the treatment just to drive up the settlement. It is, of course, totally inexcusable to stay in treatment one visit longer than is necessary to recover from your injuries.
Ruptured discs, bone fractures, and injuries resulting in scarring generally are compensated more generously than are soft tissue injuries. Insurance companies more often than not suspect that soft tissue injuries are imagined or exaggerated. Herniated discs, fractures, and scarring cannot be faked, at least not without the assistance of a quack doctor.
The severity of the injury greatly influences the settlement offer. So will the characteristics of the individual. For example, a facial scar on an attractive young woman is "worth" far more than an elbow scar on an elderly man. A permanent injury to a child brings a far larger offer than will a similar injury to an adult. A herniated disc suffered by a skilled manual laborer has a greater "value" than a herniation sustained by a person with a sedentary job. A soft tissue injury sustained by a person with a long history of suing for accidents brings a lower offer than the same injury suffered by a first time plaintiff.
The largest jury awards, and therefore the largest settlements, involve severe head injuries, loss of limbs, paralysis, and death. Even these catastrophic injuries must be carefully documented to achieve maximum settlement value. It is especially important with catastrophic injuries for the insurance company to realize that your lawyer knows how to prove these kinds of cases. Claims adjusters are terrified of the huge jury verdicts returned on cases involving severe, permanent injury.
The other factors that influence settlement value include:
- the reputation of your attorney,
- the reputation of your doctor,
- the amount of property damage,
- the amount of time missed from work, and
- the willingness of you and your attorney to hold out for top dollar.
These factors are important in all personal injury cases.
The reputation of your lawyer is crucial. If your lawyer is known by the insurance companies and their attorneys as someone who knows how to prove a personal injury case, you will get a much better offer than if your lawyer is unknown or is known to be incompetent or inexperienced. The insurance company wants to settle relatively quickly with the knowledgeable, experienced P. I. lawyer because it fears that this lawyer will obtain an arbitration award or jury verdict far in excess of the usual settlement value.
The reputation of your doctor is important. There are many doctors who are notorious for having a patient base made up almost solely of personal injury plaintiffs. The insurance companies suspect that many of these patients are faking or exaggerating their injuries. Naturally, the insurance company resents this kind of case and will not offer top dollar. The company may wish to investigate the case very closely for fraud. If you find that the office of the doctor your lawyer referred you to is crawling with shady looking characters with soft collars around their necks, or if you notice that the patients are treated as if on an assembly line, you probably ought to seriously consider finding a different doctor $ and a different lawyer too.
In auto accident cases the amount of damage to the cars is viewed with interest by the attorneys and the insurance company. A lot of damage suggests that there was a strong impact and the injuries are legitimate and possibly serious. A small amount of damage emboldens the insurance company to make a small offer, if they make any offer at all. The suspicion that you may not really be hurt arises again here. The insurance company may be willing to roll the dice on the hope that the arbitrators or jurors will not believe that you were really hurt. Particularly suspicious are the cases where the damage to the vehicles is minor and you run up huge doctor bills at the office of one of the notorious doctors. Get ready for a long and ugly battle or a very low settlement if your case fits this profile.
If you were forced to miss time from work because of your injuries, this increases the settlement value of your case. Some people canít afford to take time off even if their doctor believes that they should. Thatís a decision each individual has to make for himself. I recommend that you take a break if you can afford it. The time off can help you to a speedy recovery, and it will help the value of your case.
Insurance companies assume that people who donít miss time from work arenít hurt very badly. For auto accident cases, if your car was insured and you didnít waive wage loss benefits, you should be eligible to recover lost wages from your insurance company. If you have no wage loss coverage, your lost wage claim is added to your settlement demand against the defendant.
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 knows what he is doing, he will tell you if the first offer is too low. He will also ask you to be patient. This patience almost never fails. 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 knows what heís doing, heíll settle when the offer reaches that limit.
So you are probably asking yourself at this point how that limit is figured by the lawyers and the insurance adjusters. Good question. The personal injury lawyer relies on her experience in other similar cases and on the opinion of other personal injury attorneys to gauge the maximum settlement value of a case. I constantly consult other P. I. lawyers, both plaintiffís lawyers and insurance company lawyers, to help me set a fair settlement value on cases. Conversely, I receive calls all the time from other lawyers for my opinion on their cases.
Jury research can also be consulted to determine what juries have awarded in similar cases. Jury verdicts set the market rate for settlements. Thus, if the average jury award for torn knee cartilage with two surgeries and a guarded prognosis is $175,000, it is likely that the insurance company ultimately will offer an amount close to this to settle such a case, provided they believe your lawyer is experienced and competent and the rest of the case is solid. The company will begin by offering much less, hoping to buy its way out of the lawsuit as cheaply as possible. If your lawyer realizes the true value of the case, he will hold out until the offer reaches or closely approaches $175,000.
In a major injury case the client must rely especially heavily on the lawyer. Clients simply cannot know the true "value" of their case without an honest lawyer working on their behalf. Clients sometimes try to compare their case to a friendís. Clients often wonder why the offer on their case is less than the settlement received by a friend or family member. Each case is different. It does the client no good to compare apples to oranges. Only after many years of experience with exposure to many similar personal injury cases is it possible to accurately assess the amount for which a particular case should settle.
About the Author
Evan Aidman is the founder and principal of the Law Offices of Evan K. Aidman. Mr. Aidman received a Bachelor's Degree in psychology from the University of Florida where he was elected to the Phi Beta Kappa Honor Society after compiling a near perfect scholastic record. He graduated from the University of Pennsylvania Law School, an Ivy League Institution, in 1983.
Mr. Aidman began his legal career as a law clerk for the Honorable Samuel M. Lehrer of the Philadelphia Court of Common Pleas. After five years as an associate in various law firms, Mr. Aidman hung out his own shingle. He has been happily practicing as a trial lawyer ever since.
Mr. Aidman published a 280 page book, Winning Your Personal Injury Claim, in 1997. The book is a layperson's guide to personal injury litigation. It is must reading both for individuals who are represented by counsel and for those who have chosen to represent themselves. The book has sold over 9,000 copies and the third edition came out late in February, 2005.