Often, when a defendant business approaches a case, determining the financial bottom line of that case is the single focus of the business and its lawyers. The formula is simple – what is the likely outcome of the trial, plus defense costs? That is where the defendant looks to settle the case, depending on the specific circumstances of said personal injury case, and where the experience of a personal injury lawyer comes into play.

For example, let’s say the plaintiff has $5,000 in medical bills from a car accident, and the facts of the case suggest most juries would award about $10,000. This would seem to suggest that $15,000, give or take, is where the defendant would look to settle before expending costs. This is a microeconomic approach to each case.

However, more and more, insurance companies are taking a macroeconomic approach to each case. Rather than treating each case individually, they are approaching these cases as part of an overall litigation strategy aimed at minimizing the recovery that victims of car crashes take home – regardless of what the victim may truly deserve. The hope is that the victim will be so afraid to go to trial that he or she will settle for much less than the value of the claim, and that is how the insurance company ultimately makes its money.

Here is an example using the same scenario: The defendant’s insurance company admits fault for the accident. The plaintiff has $5,000 in medical bills, and the facts of the case suggest that most juries would award $10,000 in noneconomic damages. However, the insurance offers to settles for only $2500, half of the medical charges, even though they admit fault. If the insurance company goes to trial, it could very possibly lose ten times that amount in both damages paid to plaintiff and fees paid to his or her attorney. Not only does that not make financial sense on that specific case, it is wildly unfair to the victim.

But on a macroeconomic stage, it will save the insurance company money, as most will settle the case for much less than the worth of the claim. Who cares if the victim gets low-balled in the process? So often, I hear politicians talk about “frivolous lawsuits,” which is nothing more than tort reform rhetoric paid for by insurance company lobbyists, and I think about these insulting offers put forth by insurance companies. No one ever talks about these insurance companies and their frivolous offers. The bottom line is you want a personal injury attorney who is not afraid to take your case against the insurance company to trial, and this is often the only way to hold them accountable.

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