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Legal Procedure

What is Settlement?

An agreement between parties to resolve a legal dispute without going to trial. Settlements typically involve the defendant paying the plaintiff an agreed-upon sum in exchange for dropping the lawsuit.

Understanding Settlement

Most personal injury cases settle before trial. Settlements can occur at any stage of litigation, from pre-filing negotiations to mid-trial. While settlements provide certainty and avoid trial risks, plaintiffs should carefully evaluate offers with their attorney.

Examples

  • 1Insurance company offering a lump sum to resolve a claim
  • 2Mediated settlement during pre-trial proceedings
  • 3Structured settlement with payments over time

Why This Matters in Legal Cases

Over 95% of personal injury cases settle before trial. Understanding settlement dynamics helps set realistic client expectations. Early lowball offers from insurance companies are common—clients need to understand that initial offers rarely reflect full case value. The timing of settlement matters too: settling too early may leave money on the table if the full extent of injuries isn't yet known.

Explaining to Clients

Help clients understand that settlement is a business decision, not an admission of weakness. Explain the trade-offs: guaranteed money now vs. potentially more (or less) at trial. Discuss how attorney fees and case costs affect the net recovery. Never pressure a decision—it's the client's choice, but ensure they're fully informed.

Frequently Asked Questions

How long does it take to settle a personal injury case?

Timelines vary widely. Simple cases with clear liability may settle in 3-6 months. Complex cases or those involving serious injuries often take 1-2 years or longer. It's generally advisable to wait until you've reached maximum medical improvement before settling, so the full extent of damages is known.

Can I reject a settlement offer?

Absolutely. You have the right to reject any offer and proceed toward trial. However, understand the risks: trials are uncertain, take longer, and cost more. Your attorney can advise whether an offer is reasonable given the facts of your case and comparable verdicts/settlements.

What happens after I accept a settlement?

You'll sign a release, which is a legal document giving up your right to sue over the same incident. The settlement funds are then distributed: medical liens and case costs are paid first, then attorney fees, then the remainder goes to you. This process typically takes 2-4 weeks.

Sources

Related Terms

Mediation

A form of alternative dispute resolution where a neutral third party (mediator) helps the parties negotiate a settlement without going to trial.

Arbitration

A form of alternative dispute resolution where a neutral arbitrator hears evidence and arguments from both sides and makes a binding decision.

Statute of Limitations

A law that sets the maximum time after an event within which legal proceedings may be initiated. Once the statute of limitations expires, the claim is typically barred forever.

Discovery

The pre-trial phase in a lawsuit where each party can obtain evidence from the opposing party through various methods including interrogatories, depositions, and requests for documents.

Deposition

Sworn, out-of-court testimony given by a witness or party that is recorded for later use in court proceedings. Depositions are a key part of the discovery process.

Last updated: January 24, 2026
Reviewed by: Quilia Legal Content Team

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