Personal Injury Settlements: Myths vs. Reality

Posted on Sunday, January 10th, 2021 at 11:52 am    

In the United States, there has been an ongoing cultural conversation about tort reform for the past few decades. Excessive media coverage of those who call for tort reform has brought increased public awareness to this conversation.

Those who are in favor of tort reform claim that oversized settlement amounts and the verdicts that accompany them could threaten the economy and/or the U.S. legal system. News organizations often focus on the largest and most unusual lawsuits, especially when they seem frivolous or without merit.

In this post, we’ll take a look at personal injury settlements to separate out commonly believed myths from reality.

Fact: The Media Focuses on Dramatic News Stories, Not Your Typical Injury Settlement

Personal injury cases with the highest settlements often get the most news coverage. This happens because the cases they’re concern about are generally unusual or interesting. They are news. National media companies do not provide coverage of the average types of verdicts and settlements that happen every day in law offices and local courthouses in our country.

The average personal injury settlement seeks to make the victim financially whole after another party causes them harm. Typical settlements and verdicts do not make the injured person wealthy or cause companies to go bankrupt. The stories that tend to get the most attention are actually the outliers, not the norm.

In general, if a claim is without merit, the person filing the claim receives nothing. When someone seeks compensation for an injury, they are required to provide strong evidence to prove that the other party caused them to be hurt.

Some examples of relevant evidence include:

  • Photographs of a car accident, location of the incident, or injury
  • Bills for hospitalization, medical care, and treatment
  • Statements from those who witnessed the incident
  • Accident reports
  • Tickets or citations
  • Testimony from a relevant expert

These types of evidence are required to show a judge or jury why the injured person deserves compensation. Claimants also need to find a skilled lawyer to take up their case. When people try to create frivolous lawsuits, they usually have a hard time finding an attorney who will agree to represent them in the case.

Experienced personal injury lawyers can tell when a case is weak and without merit. In most cases, injury attorneys are paid through contingency fees. This means that they do not get paid if they fail to secure a financial settlement or win a jury verdict for their client. Because of this payment structure, personal injury lawyers are unlikely to take a case if it seems baseless.

Myth: Personal Injury Lawsuits Typically Yield Six-Figure Payouts

Some personal injury cases do result in unusually large payouts. However, six-figure payouts are the exception and not the rule in tort cases. In part, large payouts are rare because not every injury is found to hold much value.

The settlement or verdict amount for a personal injury claim is influenced by several factors, such as:

  • The severity and nature of the injuries
  • Whether the injuries result in permanent impairment or disabilities
  • The amount of lost income or missed wages and the loss of long-term earning potential due to injuries
  • The amount of insurance coverage that is available to compensate for the injured person’s expenses

All personal injury claims require evidence and are influenced by the above factors. However, some elements of tort law can distort public perception of how much the average lawsuit is worth.

Fact: Big Payouts Often Include Punitive Damages

In most unusually large settlements or verdicts, “compensatory damages” only account for a small amount of the entire payment. Compensatory damages are intended to cover the actual financial losses that the injured person sustained.

Large settlements and verdicts often include “punitive damages.” Punitive damages are a way to punish the defendant. Typically, they are only awarded in cases where the responsible person or company has acted in a particularly reprehensible way.

For example, imagine that a company knowingly ignored reports that their products might cause harm to consumers. In a case like this, a jury might decide to award punitive damages to the plaintiff.

Punitive damages are rare. The majority of personal injury cases rely on proving that the at-fault party was negligent. Someone has acted negligently if they have behaved in an unreasonable way or otherwise failed to act where they should, resulting in an injury to another party. The standard of negligence does not involve actively showing malice or causing intentional harm.

Myth: If a Class Action Gets a Multi-Million Result, The Plaintiffs All Get a Windfall

Sometimes, news stories detailing multi-million dollar verdicts or settlements are focused on class action lawsuits. This type of lawsuit can result in payouts of millions, or even billions, of dollars. Class action suits settle the claims of large groups of plaintiffs all at once. Otherwise, the civil court system might become bogged down with dozens or hundreds of very similar cases.

National news outlets recently covered a class action lawsuit against General Motors Co. that resulted in a $10 billion payout. While that is a huge sum of money, the suit involved 27 million car owners. This means that each driver was awarded only around $370 before lawyer fees.

Often, a misunderstanding of class action lawsuits can serve to skew the public’s view of personal injury cases.

Fact: States Often Have Caps on Compensatory and Punitive Damages

Many states place limits on the amount or types of compensation that a claimant can receive in a personal injury case. Personal injury lawsuits are intended to make people financially whole after they have been hurt by someone else’s negligence, carelessness, or recklessness. The vast majority of personal injury verdicts and settlements do just that.

Financial recovery through a personal injury claim is not intended to make the victim rich, but to allow them to recover appropriately.

The financial compensation awarded in personal injury cases may cover the following costs:

  • Medical care and treatment from the injury
  • Lost wages, missed work, or decreased earning potential
  • Long-term care in the case of permanent disability
  • Repairs for related property damage
  • Non-economic damages, such as mental trauma, loss of enjoyment of life, and pain and suffering

Personal injury claims are designed to cover financial expenses associated with the plaintiff’s accident and injuries.

If you have been hurt because of someone else’s negligence, it is important to speak with a qualified personal injury attorney. Contrary to popular myths, personal injury lawsuits are designed to help victims recover financially and move on with their lives after an incident.

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