Why settlement is better than litigation in personal injury cases

By Paul Russell, LegalMatters Staff • There is a good reason why more than 90 per cent of personal injury lawsuits never make it to trial, says Ontario personal injury lawyer Joshua Goldberg.

“I always advise my clients that receiving a settlement is better than gambling on a verdict,” says Goldberg, principal of Joshua Goldberg Law. “If you accept the settlement offer, you are guaranteed to receive that amount. If you reject it and go to court, there is a chance you will end up with nothing.”

Another key factor is time, he says.

“You may not get to trial until several years after an accident. Then you will encounter delays that are inherent to our judicial system,” says Goldberg. “On the other hand, a negotiated   settlement can bring your case to a close in a much shorter time.”

How settlements are reached

“After being retained by a client, I will start gathering all relevant evidence, such as medical records, police reports and eye-witness accounts,” he tells LegalMattersCanada.ca.

After reviewing the evidence, Goldberg can advise the client on the strengths and weaknesses of their case and suggest how much they may be able to collect in a settlement.

“Once we agree on an amount, I will draw up a written proposal outlining the settlement offer, and submit that to the other side, which is usually an insurance company,” he says. “They will typically come back with a lower counter-proposal, which we will study before sending back our counter-proposal.”

If no agreement can be reached, mediation is mandatory as part of a lawsuit in Toronto, Ottawa and Windsor, says Goldberg.

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“In mediation, a neutral third party … helps the disputing parties communicate with each other and find a solution that works for everyone,” states the Ontario government. “The purpose of mediation is not to determine who wins and loses but to try and resolve the dispute in a non-confrontational way and avoid the risks and costs of going to trial.”

Goldberg says a mediator can help find a middle ground and make suggestions that the parties might be more willing to consider than if it had come from the opposing side.

Personal injury trial outcomes

Noting that there is no equivalent Canadian research available, he points to a study conducted by the Bureau of Justice Statistics that examined the success rate of tort cases in the United States. (Tort law provides compensation for people who have been injured; or whose property has been damaged by the wrongdoing of others.)

According to the study:

• of the personal injury cases that went all the way to verdict, the success rate for plaintiffs was about 50 per cent; and
• the highest success rate was in auto accident cases, at 61 per cent.

“Clients are taking a risk by going to trial for more compensation,” says Goldberg, adding there are other advantages of agreeing to a settlement. 

They include:

• Plaintiffs are more involved in settlements and have a bigger say in what the outcome will be.
• Even short trials involve a large amount of preparation by the lawyer, the cost of which will be taken from the settlement.
• A settlement is over once the cheque issued to the plaintiff clears. With a trial result in your favour, there’s no guarantee the defendant will have the funds to pay. The defendant can also appeal the verdict, leading to more delay and expense.
• Settlements are usually less stressful than trials.
• The terms of a settlement are typically confidential, whereas the results of a trial are generally made public.

Another advantage is that in most cases, Canadian personal injury settlements are tax-exempt, he says.

“That is good news for plaintiffs, as people may be worried about the tax consequences of receiving a large settlement all at once,” Goldberg adds.

The advantages of a trial

Some clients will want to reject a settlement and go to trial for various reasons, he says.

“They may believe that a court will award substantially more damages than the defendant was willing to offer,” Goldberg says.

It also can be a matter of pride, he says, noting that the defendant generally does not have to admit to any wrongdoing with a settlement.

“With a trial, the court will determine and publicly state if the defendant did anything wrong,” he says. “That can be cathartic for plaintiffs who want to be heard and who are looking for closure.”