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What Is An Informal Early Settlement In Personal Injury Law



In the context of personal injury law, an informal early settlement is the manner in which most cases are resolved. Most lawsuits hinging on issues of fault and liability for an accident or injury are settled through the vehicle of informal early settlement. The settlement process involves the parties in the dispute, insurance providers, and attorneys, if any, representing the parties. Settlements usually require negotiations between parties, and then a more formal written agreement is prepared and signed by all parties. The agreement is a release in which all parties agree not to take any further legal action in exchange for the terms of the settlement they have achieved. Instead, the parties opt to resolve the matter short of initiating a formal suit, or continuing with the litigation if already filed, and come to an agreement on the amount of and payment of money to the injured party.

The Informal Early Settlement Process

For an accident or injury victim, the process of initiating and prosecuting an accident or injury claim usually involves multiple steps. The first stage of the process for most injury or accident plaintiffs involves conducting informal discussions and negotiations. Those discussions and negotiations take place between the injured party and one or more insurance companies representing the party or parties who caused the damages or injury. The injured party's insurance company, if any, will also take part.

Next, if the insurance company representing the party at fault denies the claim asserted by the injured party, then the injury or accident victim must file a lawsuit to advance her claim. The personal injury lawsuit, if it continues to the point of conclusion through the court system, will require a trial before a jury panel or judge. Regardless of whether the arbiter of the trial is a judge or jury, that party will make the ultimate determination of whether the injury or accident victim has effectively, successfully, and conclusively established liability. If liability is established, the arbiter will determine the amount of money damages to award to the injured party for compensation.

Alternative Dispute Resolution

There is an alternative to informal early settlement that is still short of the requirement of formal litigation through the court system. The intermediate type of approach between the two alternatives of a suit and informal early settlement is alternative dispute resolution (ADR). Alternative dispute resolution is the term used to describe any one of a number of methods for resolving disputes, controversies, or conflicts short of the requirement of formal litigation, through tools such as mediation or arbitration. A small percentage of personal injury claims progress to the ultimate stage of trial. Most cases are resolved prior to the stage of trial, whether through informal early settlement, alternative dispute resolution, or other method.