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What are Personal Injury Settlements?

Mary McMahon
Updated May 17, 2024
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Personal injury settlements are agreements made before a personal injury case is sent to court to compensate the claimant and resolve the matter. In the settlement, the respondent agrees to pay a set amount and the claimant abandons future claims related to the case. If both sides can reach an agreement, a contract will be signed to finalize the arrangement and the case will be dropped before it arrives in court. Settlements are used for a variety of civil suits to avoid the expense and public attention of a trial.

In personal injury cases, people claim that another party is liable for a physical injury such as whiplash in a car accident. They believe that the other person is responsible for paying the costs associated with the injury and may also argue for compensation for less tangible damages, like emotional distress. A suit can be filed to recover these damages. Once served with a notice about a suit, respondents may opt to proceed to court or offer personal injury settlements.

People are more likely to be offered personal injury settlements when a respondent knows that a court will likely find liability and award a high fee to compensate the claimant for damages. If there is doubt about how the case will proceed, there is no advantage to proposing a settlement, as it may be possible to avoid liability altogether and not have to pay anything. Respondents may also think about how the claims being made will reflect on their reputation; there may be an advantage in reaching an out-of-court settlement to avoid attracting the notice of the public with a controversial matter.

In personal injury settlements, the respondent in the case agrees to pay a set amount of money, usually determined by looking at the costs directly associated with the claim and considering whether additional compensation for issues like pain and suffering might be needed. The claimant, by accepting the settlement, waives the right to take the case to court in the future, as the matter is considered resolved. The respondent has agreed to pay damages and the claimant has received those damages and agreed to them.

Representatives of a respondent can approach the claimant's legal team at any time with an offer of settlement. The team will review it, discuss the matter with the defendant, and respond. They may refuse the offer, preferring to take their chances in court. They can also counteroffer with new terms. Rarely, people may accept the settlement outright. Since respondents usually start low in offers for personal injury settlements, accepting the first offer is not generally advised, as it may be possible to get better terms.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGeek researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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