Personal Injury Settlements: Myths vs. Reality
In the past several decades, there have been many public conversations about the perceived need for tort reform in the United States. Cultural commentators and media figureheads have argued that the U.S. legal system allows for too many frivolous lawsuits.
Those who argue in favor of tort reform usually cite large and unjust settlements. They point to verdicts that have the potential to threaten the economy or the legal system. In reality, these types of verdicts and settlements are very rare.
The constant media focus on six-figure settlements has created a widespread misperception. Namely, that people are regularly securing millions of dollars from lawsuits with no merit.
Let’s explore some of the myths about personal injury settlements and compare them with the facts.
Sensational Media Narratives vs. the Facts
Sensationalist approaches to journalism are common, especially at the national level. Huge media corporations tend to focus on court cases involving the highest settlement or verdict amounts. Media companies do not shine their spotlight on the normal verdicts and settlements happening in attorneys’ offices and local courthouses every day.
Normally, settlements serve their intended purpose of making an injured victim financially whole. Settlements and verdicts very rarely make the victim wealthy or bankrupt the corporations that are involved. In reality, lawsuits that are frivolous or without merit usually result in the claimant getting nothing.
Personal injury claims must be backed up with proof. Relevant evidence is necessary to secure financial compensation.
Such evidence may include:
- Documentation of medical bills and costs
- Photographic evidence corroborating the claimant’s version of events
- Recorded or written witness statements
- Expert testimony
- And more
If you file a frivolous lawsuit without convincing evidence, an insurance provider will probably not agree to settle with you. Also, it will be difficult to find a personal injury attorney who will represent you without the necessary evidence.
Most personal injury lawyers charge their clients through contingency fee agreements. This means that unless they secure financial compensation in the case, they receive no payment. Qualified attorneys who work on the basis of contingency won’t take a case unless they believe they can prove that someone is responsible for the injuries that the client suffered.
Common Reasons for Large Settlement and Verdict Amounts
While most cases result in a modest settlement or verdict amounts, some cases do end with large payouts. Still, multi-million dollar payouts are incredibly unusual. Most injuries do not hold very much value. The amount of financial compensation that a claimant can demand for a personal injury is dependent on many different factors.
Some of these factors include:
- The type, severity, and extent of the injuries
- Whether or not the claimant has suffered permanent impairment
- Whether or not the victim has missed work and lost wages
- The amount of insurance coverage that is available to offset the injured person’s losses
These factors are unique in each personal injury case. Most of the time, any monetary compensation awarded to the victim will only serve to make them financially whole.
The Role of Punitive Damages
When the media focuses on personal injury cases with enormous payouts, the actual compensatory damages usually account for only a small percentage of the settlement. Most high-profile cases involve payments in the form of punitive damages.
This type of payout is fairly rare. They are usually awarded in cases when the company or individual being sued has acted in a reprehensible manner. When this happens, the jury may decide to penalize the person or company with punitive damages in addition to standard financial compensation for the victim. For instance, a jury may wish to punish a corporation that has deliberately downplayed the harms that their products might cause.
The majority of personal injury lawsuits rely on the claim that a person or company was negligent. Negligence means that someone caused injuries by acting unreasonably or inappropriately. Negligence does not imply an active disregard for the well-being of others, only a lack of appropriate care.
Proof of recklessness or intentionally malicious actions is usually necessary for a jury to award punitive damages. The moral outrage that extreme personal injury cases arouse makes them a better focus for the national media. It might be tempting to think that these sensational cases are the norm, but they are not.
Payments from Class Action Lawsuits
Class action lawsuits are cases in which the damages for large groups of people with similar claims are decided at once. This helps to avoid the messy possibility of thousands of comparable claims finding their way into the legal system simultaneously. Those who exaggerate the problems of the current legal system often cite class action lawsuits as an example of why tort reform is necessary.
One recent high-profile example of a class action lawsuit was a case against General Motors Company. The class action lawsuit was filed for the damages from faulty ignition switches in GM vehicles. The lawyers in the class action suit sought damages of $10 billion.
Because news outlets focus on the $10 billion price tag, it might seem like the giant corporation is the victim. They are not. While $10 billion is a massive payout, this class action lawsuit involved up to 27 million cars, trucks, and other vehicles. If the jury awarded the full amount, the claimants would receive an average of $370 each.
And as we noted above, personal injury attorneys usually operate on contingency fee agreements. That means the amount that each plaintiff would actually receive would be $370 before court fees and payments to the attorneys.
As you can see, the myths about frivolous lawsuits and multi-million dollar settlements do not hold up against the facts. Most personal injury settlements and verdicts serve the intended purpose of covering the costs for injured victims.
When to Contact a Personal Injury Attorney
If you have been injured because of someone else’s negligence or recklessness, it is crucial to consult a qualified personal injury attorney. Having a lawyer represent your interest against the company or person who caused your injuries gives you the best chance of securing reasonable financial compensation.