When a child is seriously injured, all parents want to make sure that their child receives the best care possible for the medical and/or psychological injury.

    When a child is injured due, at least in some part, to the fault of another, most parents go through the sometimes difficult process of attempting to determine whether bringing legal action against the responsible party will or will not be in the best interest of their child.

    There is a general perception in the public that litigation can be difficult for children and bringing a case may not be worth it. This is particularly true in cases of sexual molestation or abuse.

    However, the courts and the law provide special protection to children in litigation and, hopefully, this article will help parents make an informed choice as to how to proceed when their child has been seriously injured in an accident or by the intentional act of another.

    B.  What Rights Do Children Have to Recover Money Damages from At-Fault Defendants.

         i.  Children have same rights as adults to recover money damages.

    Children, through their parents or guardians, have all of the rights of an adult to hold accountable people and companies responsible for their injuries and collect money damages based on any past or future medical and attendant care expenses, past and future loss of income and earning capacity, and past and future pain, suffering and emotional distress damages.

         ii. Damage recoveries of minors carefully protected by the courts.

    Although the amount of damages that a child can recover is in no way limited by virtue of their being a child alone, any monetary settlement or award will be carefully protected by the court as will be discussed below.

         iii.Types of incidents that can lead to lawsuits being brought on behalf of children.

    This article will focus on the “injuries” received by a child as a result of a traumatic event, rather than the many types of trauma that can cause a child injury.

    However we will provide a partial list of the type of accidents or incidents that can lead to a child injury case where fault of another person or entity can be established:

         ►    automobile accidents.

         ►    truck accidents.

         ►    taxicab accidents.

         ►    train accidents.

         ►    pedestrian accidents.

         ►    bus accidents.

         ►    aviation accidents.

         ►    accidents caused by the dangerous condition of private property.

         ►    accidents caused by the dangerous condition of public property.

         ►    toxic exposure accidents.

         ►    accidents caused by defective products.

         ►    injuries resulting from medical malpractice.

         ►    animal bites.

         ►    injuries caused by sexual abuse.

         ►    injuries caused by physical abuse.

         ►    injuries caused by the negligent action or failure to act of people who are in charge of protecting children from harm such as teachers, safety guards, daycare centers, school bus drivers, school officials, babysitting agencies, foster parents or foster care agencies, preschools or any similar person or entity.

    The above list is by no means inclusive and if a child is injured as the result of the negligent or intentional misconduct of another, a consultation with an attorney should always be considered to see if there is a viable case.

    C.  What Is the Definition of a Minor under the Law.

    The law generally refers to children as “minors.” A minor is any child under the age of 18 and not “emancipated,” i.e., legally living on his or her own.

    D.  Who Can Bring a Lawsuit on Behalf of a Minor.

         i.  Lawsuit or claim must be brought by guardian (unless the minor is legally emancipated).

    Children, under the age of 18, are not allowed to bring a lawsuit on their own. Their claim or lawsuit must be prosecuted through a guardian or Guardian Ad Litem.

         ii. Child “owns” the lawsuit.

    However, even though a child is not entitled to bring the lawsuit by themselves, the lawsuit that is brought “belongs” to the minor. The guardian or Guardian Ad Litem (i.e., guardian “for the litigation”) is simply acting on the child’s behalf.

         iii.Simple procedure for appointing Guardian for the litigation.

              a.  If two parents living together, one usually becomes the guardian.

    The procedure for the appointment of a Guardian Ad Litem is usually very simple. In a case in which the child has a living parent, one of the parents agrees to act as the Guardian Ad Litem.

    However, if both of the parents have their own “individual” claim against defendant, then there may have to be another family member or friend of the family appointed guardian ad litem.

    When the attorney files the legal complaint in the case, the attorney simply files a special form listing one of the parents as the Guardian Ad Litem (i.e., guardian for the litigation).

              b.  Settlement of cases where no formal lawsuit was filed.

    In a case in which there is a settlement for more than $5,000 and a lawsuit was not filed, a Guardian Ad Litem can be appointed for the purpose of having the settlement approved by the Court.

              c.  Special rules when s minor is 14 or older.

    In cases in which the child is at least 14 years old, application for appointment of a Guardian Ad Litem must include the signature of the child indicating his or her desire to have the particular person appointed as a guardian for purposes of the litigation.

              d.  A lawsuit for a minor cannot be brought without an attorney.

    Further, in any lawsuit involving a minor, an attorney must represent the minor and guardian. In other words, the guardian cannot act as the attorney because this would be considered practicing law without a license.

              e.  When no parent alive or available.

    In cases in which a minor does not have a living parent, generally the adult in charge of taking care of the minor will become the Guardian Ad Litem or be appointed independently by the Court.

              f.  Problems with dueling parents.

    Problems sometimes arise in situations in which divorced parents cannot agree on which one of the parents should become the Guardian Ad Litem. In this situation, the Court would probably act by appointing whichever parent it believes would be the most appropriate Guardian Ad Litem.

    E.  Special Protections for Child Witnesses.

    Young children are afforded special protections by the law when they have to testify. If they are too young, i.e., not old enough to know the difference between what is true and what is false, they will not be required to testify at all.

    When they do have to testify at a trial, a judge will go to great lengths to make sure that neither attorney asks the child any leading questions (i.e., questions that suggest answers) and that the child is not in any way intimidated or treated with anything other than the utmost respect.

    At depositions, the plaintiff’s attorney can ensure that the child is similarly protected. If an attorney for the defense in any way attempts to intimidate the child, the plaintiff attorney can stop the deposition, and make a motion to the court for a protective order protecting the child, and in cases of severe intentional abuse, a special judge can be hired or appointed to protect the child at a deposition.

    F.  Special Priorities for Speedy Trial Setting.

    Any minor under the age of 14 is entitled to preference in the setting of a trial. This will allow the case to go to trial more quickly than other cases, and in counties with crowded trial calendars, the case of a minor under the age of 14 must be given an available courtroom before most other cases.

    G.  Prenatal Injuries.

    A child may recover for injuries sustained while a fetus as long as the child is born alive. This becomes particularly important in cases in which a pregnant mother receives an injury severe enough to also injure the fetus and, more particularly, in medical malpractice cases against obstetricians and gynecologists whose negligence before birth leads to significant injuries to a soon-to-be child who may suffer lifelong consequences, particularly from loss of oxygen to the brain in the birth process.

    H.  Special Standards and Duties in Cases Involving Minors.

         i.  Adults must use greater care toward minors.

    When attempting to establish whether or not a person or entity is at fault in an accident involving a minor, the law of California states that adults must use greater caution for the protection and safety of young children than for adults with normal physical and mental faculties.

    Thus, a driver, while driving in an area in which they know that children are present, such as a school or neighborhood where children play, must utilize extra caution in driving the vehicle and anticipate the sometimes thoughtless and impulsive behavior of children.

    The presence of children is itself a warning of danger requiring the exercise of care for their safety.

    If the driver sees a child in a place of danger, the driver must keep their car under such control as is reasonably necessary to avoid injury.

         ii. Special rules when assessing potential negligent conduct of children.

    In terms of assessing a child’s own contributions to an accident, children five years of age and younger cannot, as a matter of law, be found negligent. Older children will be held to a standard of care of children of a similar age.

    Thus, children are not normally held to adult standards of conduct but must use that degree of care ordinarily exercised by children of like age, intelligence and experience.

    If a child is found to be partly negligent for causing his or her own injury, the award will be reduced by a percentage of their negligence. For instance, if a jury awards a child $1,000,000 for their injury, but found the child 75% responsible, the award will be reduced to $250,000.

    I.  Liability of Schools for Injuries to Minors.

         i.  Special duty of care of school toward school children.

    Although a school district is not an insurer of its pupils’ safety, a school district and its personnel owe a legal duty to exercise reasonable care in supervising students on the school premises and may be held liable for injuries caused by the failure to exercise sufficient care.

    The amount of care that the school must exercise towards its students varies with their age and maturity.

    The school staff has a duty to adequately supervise people attending school functions and may be liable even for intentional injuries inflicted by other participants.

         ii. Usually school has no duty to protect children off of school grounds.

              a.  General rule.

    Generally, a school district does not have a duty to protect against injuries incurred by students off of the school’s premises unless the injury occurs in an area which is found to be an extension of the school premises, such as a nearby street.

              b.  Exceptions.

    In some situations, a school district has been found liable for not providing a crosswalk to allow for the safe crossing of the street of children when the school district knows that children frequently will cross in the middle of the road and need protection.

    A school district is not under a duty to provide transportation to and from school for children; however, when it does provide transportation it is responsible for the children and can be held liable for the negligence of a bus driver.

    J.  Special Duties of Care for Any Person or Entity in Charge of Caring for Children.

    If a person or entity accepts responsibility for taking care of children, whether in a private setting such as a home or a public setting such as a daycare center, that person or entity owes a special duty to act reasonably to protect the children.

    This means that they must anticipate the erratic and impulsive behavior of children and use due care in controlling the children and the premises.

    Thus, a daycare center will be found responsible, for instance, for a child who wanders out of a daycare center and is injured. The same would be true if neglect within the daycare center causes injury to a child.

    K.  Special Protection of Children Against Sexual Abuse.

    Anybody in California can bring a lawsuit if they have been sexually abused by another person. This would include both genders, adults and children. Sexual abuse cases can involve a child molested by an adult (the case can be brought while the child is still a minor by a guardian or sometimes, and, if the statute of limitations has not run, by an adult who had been molested as a child) and a child molested by another child. The gender of the perpetrator and victim is irrelevant

    There are both criminal and civil statutes prohibiting sexual abuse and if a plaintiff can prove a violation of either a criminal or a civil statute, he or she is entitled to recover monetary damages.

    L.  Specially Protected Classes of People.

    In most sexual abuse cases, a plaintiff must prove that the sexual contact with him or her was offensive, unwanted and non-consensual.

         i.  Minors and incompetents.

    However, there are several classes of people who are protected against any type of sexual touching regardless of whether or not the plaintiff consented to the conduct and regardless of whether or not the conduct was offensive or unwelcome.

    The largest class of people protected under these laws are minors who, in California, are children under the age of 18. It is absolutely prohibited for an adult to have any type of sexual contact with a minor, welcomed or unwelcomed.

    M.  What Damages Are Recoverable in a Child Injury Case?

    In a child personal injury case, plaintiff can recover for past medical expenses, future predicted medical expenses, past wage loss, future predicted wage loss and for past and future pain and suffering.

    The medical expenses are determined by the testimony of physicians or other health care providers. Frequently, an economist or an expert in the industry determines the amount of future wage loss; however, no expert can testify to the value of pain and suffering.

    Pain and suffering is typically the most significant element of a plaintiff’s damage and it includes emotional distress. Contrary to popular belief, there is no formula for pain and suffering awards and it varies greatly from case to case depending upon the location of the case, the seriousness of the injury and how well the case is presented.

    N.  Punitive Damages.

    Under California law, if a plaintiff can prove that the conduct of the wrongdoer was fraudulent, malicious or despicable, he or she is entitled to recover punitive damages which are intended to punish the wrongdoer and provide an example for the rest of society. The focus of this type of case is generally on the wrongdoing of the defendant as opposed to the injury to the plaintiff. The amount of punitive damage will vary depending upon the heinousness of the defendant’s misconduct and its economic status. The law recognizes that large companies have to pay more money in punitive damages to be adequately punished than small companies or individuals. In motor vehicle cases, punitive damages are most frequently awarded against drunk drivers.

    O.  Special Considerations When Assessing the Future Consequences of a Child’s Injury.

         i.  Children’s rights under the law to recover damages for future consequences of their injuries.

    Thankfully, most children recover more quickly and more completely than adults do from most injuries. However, many injuries will leave permanent emotional and physical scars on children and will cause them pain and loss of function for an entire lifetime.

    Although children tend to be more resilient in terms of recovery from physical injuries, they are more vulnerable to lifetime consequences from psychological trauma or even the psychological result of a physical injury.

    Under the law, children are entitled to recover monetary damages for any future medical care, attendant care, loss of income and pain and suffering that was caused by a trauma.

    Thus, as is true for most young children, if they have not worked a day in their life, they can still recover for a loss of earning capacity if a childhood trauma causes a later inability to work.

         ii. What to do when the future residuals from an injury will not be known until the child is older.

    Sometimes it can be very difficult to predict the future consequences of an injury to a science.

              a.  Advantages of delaying a case until residuals of injury are known.

    Besides medical malpractice cases or cases against public entities, a child has until they are 19 years of age to bring a lawsuit. Sometimes it is wise to delay a case until the child is older and the consequences of the injury and how it will effect the plaintiff’s functioning will be more clear.

    For instance, in a case involving a traumatic brain injury of a eight-year-old, it may make sense to wait until the child is 14 or 15 to see how the child performs in complex mathematical tasks to determine how the brain injury will be likely to manifest itself in the future.

    Another example might be a child who suffers an injury which will clearly preclude the child from competing in the manual labor market, but if the child is bright enough or does well enough in school, the child will be able to go to college and earn even more money than a skilled laborer. If the child is 11 or 12 at the time of the injury, one might want to wait until the child has graduated from high school to better assess the plaintiff’s aptitude to compete for white collar jobs before settling the case or bringing it to trial.

              b.  Disadvantages to delaying a case.

    However, there can be serious consequences for delaying a case which have to be weighed against the advantage of learning more about a child’s likelihood to succeed or not succeed in the future and the likelihood of the need for future medical, psychological treatment and attendant care.

    First of all, the longer a case is dragged out, the more likely it is that key evidence and witnesses will not be available at trial. This may make the difference between a plaintiff winning or losing a case.

    Secondly, the child and his or her family will be prevented from receiving the “closure” which is sometimes very helpful to affect a child’s emotional and sometimes even physical recovery.

    Finally, there is no question but that jurors will react more sympathetically and favorably to a cute little child than they will react to a despondent, rebellious, ill-mannered adolescent. This can have an enormous effect on the size of a verdict, particularly a verdict for pain, suffering and emotional distress. Thus, waiting, for instance, for an eight-year-old to turn 15 may not be a very good idea at all.

              c.  Generally speaking, long delays should be avoided.

    Therefore, in most cases, it will be worth it for the plaintiff to proceed with a case while the child is still young, and delay it maybe only a year or two if that delay will make a real difference in predicting the future outcome from an injury

    P.  The Importance of Retaining Experts Who Can Predict the Future Consequences of a Child’s Injury.

         i.  Extra care must be taken to retain experts with a ability to predict future consequences of an injury.

    Because it sometimes so difficult to predict what the future outcome of a child’s injury will be, plaintiff attorney must take extra precaution in making sure that they retain expert witnesses with sufficient background, knowledge and training to predict a child plaintiff’s future needs, losses and suffering.

         ii. The “probability” standard.

    The standard for an award for future damages is a probability standard. That is, based upon reasonable probability: will the child more likely than not suffer from an injury and require care or lose income for “x” number of years or a lifetime into the future.

    On medical issues, the standard is whether, with reasonable medical or psychological probability, the plaintiff will incur damages in the future and the extent of those damages.

         iii.Necessary qualifications and knowledge of plaintiff’s experts.

    Thus, it is imperative that a plaintiff’s medical or psychological experts have the background, experience and knowledge to make reasonable and credible estimates of a plaintiff’s future suffering, needs and losses.

    It is also important for the plaintiff’s medical or psychological expert to be familiar with studies that have now been conducted on virtually all injuries, which will indicate the likelihood of the future consequences of trauma to a child.

         iv. Examples of expert predictions based on studies and experience.

    For instance, a psychological expert in a child abuse case can reasonably predict, based on studies and his or her own knowledge, that when a child reaches puberty, becomes sexually active, attempts to enter into intimate relationships, marries and has children of their own, that he or she will have to struggle with the abuse and more likely than not will require psychiatric treatment at these stages of their life.

    In the case of, for instance, a traumatic brain injury to a child, the expert neuropsychologist or physiatrist will be able to predict that the child will no longer have enough cognitive skills to compete in the labor market as a white collar worker and will require specialized training to even perform simple manual labor.

         v.  Retention of vocational/life care planning experts.

    In addition to retaining highly qualified medical and psychological experts, the plaintiff attorney must also retain a vocational/life care expert to testify, based upon the testimony of the medical practitioners, what the cost of the plaintiff’s future care needs will be and what their loss of earning capacity will be as a result of not being able to work at all or only able to work at a limited number of jobs.

    This expert will make predictions of future income loss based on the child’s pre-injury aptitude and work history of parents or family members.

         vi. Retention of economists.

    An economist must also be retained to explain to the jury the amount of money that will be required to fully compensate the child for all of his or her future losses that are predicted by the other experts.

    Q.  Settlement of a Child Injury Case: Procedural Requirements.

         i.  Requirement of Court approval of settlements.

    The Courts in California go to great lengths to ensure that a child’s case is settled for a reasonable amount of money and that the settlement money is well protected.

    A judge in California must approve any settlement of a minor’s claim over $5,000.

    When the case settles, the plaintiff’s attorney prepares a petition for settlement of a minor’s compromise, signed by the guardian and filed with the Court. The Court then orders a hearing where at least the plaintiff’s attorney, the guardian and any child 14 or over is present.

    The judge carefully reviews the petition and carefully questions the guardian and child over 14 to make sure that they understand the consequences of the settlement and that they approve it.

         ii. Petitions to the Court to approve settlements of minors.

    The petition itself includes a summary of the case, a discussion of insurance coverage issues if relevant, a discussion of the child’s injuries with reports from doctors and psychologists sometimes included, a statement by the plaintiff’s attorney under oath that they have no connection with the defendant in the case, and a breakdown of the settlement proceeds including the amount of those proceeds which will go to the attorney for fees and reimbursement of costs and which proceeds will go to the minor.

    The Court must approve any attorney fee award and, normally, there must be special circumstances before a plaintiff’s attorney can take a fee in a minor’s case of more then 25%. These special circumstances can include the amount of work and risk involved in the case and whether it has to be tried. (Unfortunately, the low fee award can sometimes be a disincentive for an attorney to take on a difficult case of a minor.)

         iii.Court approval of where minor’s settlement proceeds must be placed.

    Then the Court has to approve what will be done with the minor’s portion of the settlement. In the case of lump sum payments, i.e., money which must be placed into some type of “blocked” account on behalf of the child where the money cannot be taken out of the account without a special petition to the court.

    Sometimes, if the money is needed to pay for a child’s accident-related medical, psychological or special schooling costs, some money may be set aside or given to the parents specifically to provide for these needs; however, the parents must carefully report how the money is spent to the Court on a periodic basis.

         iv. Child entitled to entire settlement proceeds when reaches 18 unless there is a “structured settlement.”

    When the child is 18, the child is automatically entitled to the money.

    Another alternative is to have the court approve a “structure settlement” which will be discussed below.

    R.  Structured Settlements for Minors.

         i.  Structured settlements usually favored for minors.

    In any significant injury case in which there is a recovery of something in the range of $50,000 or more, it is usually a very good idea for the parents, through their attorney, to arrange for a structured settlement for the child.

         ii. What is a structured settlement?

    A structured settlement basically means that the defendant or the defendant’s insurance company in a child injury case will take all or a significant portion of a child’s net recovery (i.e., recovery after fees and costs) and go to another insurance company and purchase an annuity on behalf of the child. The annuity will pay the child benefits from some date after the settlement until some specified date into the future -- sometimes a lifetime.

         iii.Different ways to structure future settlement payments.

    There are literally hundreds of ways in which a settlement can be structured; however, most typically in the case of a child plaintiff, if there is sufficient enough money, some type of payment schedule will be put into effect to logically deal with the child’s future needs.

    If the family needs money for the child’s care right away, then there may be immediate monthly or yearly payments to the guardian on behalf of the child.

    If the child does not need money right away, or there is enough money to buy additional future benefits, then frequently a “college fund” is set up for the child which may provide for payments of, for instance, $10,000 to $30,000 when the child reaches the ages of 18, 19, 20 and 21. (The child will then receive the money whether or not he or she goes to college.)

    If there has been a diminution in earning capacity, an amount of money may be provided for the plaintiff to supplement the loss of income when they become an adult. For instance, monthly payments beginning at the age of 22 for “x” amount of dollars a month.

    There can be additional lump sum payments at, for instance, the age of 25, 30 and 50, to help support the plaintiff and perhaps pay for a house.

    There is no limit to the amount of different combinations of payments that can be included in a structured settlement. However, options may be limited by the initial amount of net settlement money that is used to purchase the structure. More money buys more benefits and more variations of payment schedules.

         iv. Future payments will exceed lump sum settlement amount.

    Because payments are made over time, and the annuity company is able to invest the money immediately, the total amount of structured settlement payments will far exceed the plaintiff’s net settlement amount.

    For instance, a net settlement of $1 million may be able to buy $10 million of future payouts, though many of those payouts will occur 30 or 40 years from the time of the settlement when the money will be worth less than it is today.

         v.  Reasons why structured settlements are favored for children.

    Structured settlements are generally recommended in child injury cases because:

         ►    the payouts themselves are not taxable, though interest on a lump sum payment at the time of the settlement is taxable.

         ►    structures help ensure the financial security of the plaintiff into the future.

         ►    a structure gives the parents the ability to control how the minor will receive his or her settlement proceeds after he or she turns 18. Most parents are rightfully scared of the consequences of an 18-year-old coming into several hundred thousand dollars or more in cash. A structure avoids this outcome because the money can be slowly doled out over time.

         vi. Disadvantages of a structured settlement.

    The major disadvantage of a structured settlement is that when it is purchased and the settlement approved, it cannot be changed. Thus, as is sometimes the case, the plaintiff needs or wants more money when he or she is, for instance, 23, then plaintiff cannot undo the structured settlement and must wait for the payments to occur over time.

    S.  Statute of Limitations in Sex Abuse Cases Involving Minors.

    A minor has at least until his or her 26^th birthday to bring a case for sexual abuse which occurred while the plaintiff was under 18. Further, if the plaintiff can establish that he or she did not discover injury from unlawful conduct until after reaching 26, the plaintiff has until three years from the date of discovery. (An important exception to this rule is that a claim against a governmental entity such as a school may have to be brought within six months, or at the latest one year from the act of sexual abuse.) An adult has one year from the date of discovering harm from the sexual abuse to be able to bring an action. There are many exceptions to the statute of limitations and, therefore, an attorney should be consulted before initiating or giving up on a potential sexual abuse case.

         i.  Special statute of limitations for child sex abuse cases.

    Most injury cases involving minors must be brought within one year of the minor’s 18^th birthday, i.e., before they turn 19. The one exception to this general rule is claims against a government entity which in most situations must be brought within six months.

    However, the California legislature has recognized how difficult it is for minors to recognize the wrongfulness of the conduct of the perpetrator and the harm that they suffer from sexual abuse; therefore, there is a special statute of limitations law which applies only to cases in which a person is sexually abused as a minor.

    In a case for recovery of damages from sexual abuse that occurred when the victim was a minor, the victim has at least until the age of 26 to bring an action. Further, a plaintiff can bring an action at an even later age if the plaintiff brings the action within three years of the date that he or she reasonably should have discovered that an injury was caused by sexual abuse as a minor.

    There is only one limitation on this law and that is, when a plaintiff is suing someone other than the perpetrator, the case must be brought before the plaintiff turns 26 and the plaintiff does not receive the benefit of the three-year late discovery statute.

         ii. Difficulty of proving delayed discovery.

    Whether or not plaintiff discovered, or should have discovered psychological injury within three years of the date he or she brings a lawsuit is frequently difficult to prove, especially if the plaintiff has been in psychotherapy discussing the issue or has talked about the sexual abuse to friends or relatives more than three years before bringing the lawsuit. In addition, in most situations, the perpetrator will not have sufficient funds to pay for plaintiff’s injuries. Further, the more time that passes from the time of the abuse to the time of the lawsuit, the more difficult it is to prove the case. Key witnesses and evidence may disappear over the years. Also, generally speaking, younger plaintiffs make more sympathetic witnesses in sexual abuse cases.

    Therefore, one should bring a case for childhood sexual abuse as soon as he or she can, but certainly before his or her 26^th birthday. If the potential plaintiff is over 26 years old, he or she should not give up, and should still seek the advice of an attorney; however, the case may be more difficult to win.

         iii.Special filing requirements for delayed discovery cases.

    In cases in which a plaintiff over 26 years of age brings a lawsuit based on childhood sexual abuse, the plaintiff must file certificates of merit by an attorney and mental health care practitioner stating that the mental health care practitioner reasonably believes that childhood sexual abuse occurred, and the attorney reasonably believes that the plaintiff did not discover his or her injury more than three years before filing of the lawsuit.

    There are other specific pleading requirements in this type of case that are detailed in California Code of Civil Procedure section 340.1.

    T.  Considerations in Evaluating Cases for Settlement.

         i.  Many different factors are taken into consideration when evaluating settlements.

    There are many, many factors which are utilized when evaluating a case for settlement. The perception that many of the public have that a case settles for three times the medical bills and wage loss cannot be further from accurate. There are cases that settle for millions of dollars in which there are no medical bills or wage loss and there are cases that settle for a few thousand dollars in which there are hundreds of thousands of dollars of medical bills and wage loss. Following are some of the factors that are relevant to evaluating the case for settlement purposes:

         ii. Liability.

    The clarity of liability (i.e., fault) in the case is a critical settlement factor.

    In a case in which liability is unclear or the plaintiff has a substantial chance of losing, the settlement value of the case has to be reduced significantly to factor in the plaintiff’s chances of losing.

    Theoretically, if the value of an injury claim is $100,000, but plaintiff only has a 50/50 chance of winning, a $50,000 settlement may be appropriate. However, plaintiffs must always realize that cases against large defendants or in cases in which the defendant is insured, that the plaintiff has a lot more to lose than the defendant. In the example above, if the insurance company turns down a $50,000 demand and the plaintiff wins $100,000, payment of an additional $50,000 will mean very, very little to a large insurance company or corporation. On the other hand, if the plaintiff turns down the insurance company’s $50,000 offer and wins nothing at trial, it could create a devastating financial blow in which the plaintiff is unable to pay for his or her bills.

         iii.Comparative fault of the plaintiff.

    If a plaintiff is found to be partially at fault for causing his or her own injury, then their potential jury award is reduced on the basis of their percentage of fault. In other words, if a case were to go to trial, and plaintiff were to receive a $100,000 verdict, but was found to be 25% at fault, the plaintiff’s verdict would be reduced to $75,000. Thus, when settling a case, plaintiff should reduce his or her expectations of a settlement by the likely finding of percentage of fault that would occur if a case were to be tried.

         iv. Likely jury verdict value of the case.

    In cases in which insurance policy limits are not an issue, most good attorneys attempt to settle the case based upon what a jury would be likely to award if the case went to trial.

    Determining what a jury will award in a given case is more of an art than science; however, reasonable estimates can be made based upon what jurors have awarded in similar cases in similar venues (i.e., locations). Most verdicts are reported in “jury sheets” that lawyers read and utilize when attempting to assess the value of any particular case.

         v.  Aggravated liability.

    In cases in which a jury is likely to get angry at a defendant for misconduct that was something more than negligent, it is known that jurors are likely to “spike” their verdict and award more money for a plaintiff’s injury than they would if a defendant’s misconduct was merely negligent.

    Aggravated liability situations, such as a defendant who was found to be driving drunk or a defendant who intentionally hurts a plaintiff will increase the risk to the defendant of a large jury award and this should be taken into consideration in settlement.

         vi. Punitive damage exposure.

    If the defendant’s misconduct is so bad that there is a risk for punitive damages, i.e., the jury awarding damages specifically to punish the defendant, this should become a major factor in settlement negotiations. A potential award of punitive damages is complicated by the fact that under the law, the insurance company is not allowed to pay an award for punitive damages; however, normally, the defendant, through a personal attorney, attempts to apply pressure on the insurance carrier to pay more in settlement so that the defendant will not be exposed to the punitive damage risk.

         vii.The character and credibility of the parties.

    A plaintiff’s case is worth more if he or she is likeable and believable. It is known that jurors will award more money to people that they like and believe than people whom they dislike and don’t believe.

    To a lesser extent, this is also true for defendants. A likeable or believable defendant is likely to fare better in a lawsuit than someone with the opposite traits.

         viii.    The extent of the injury.

    Theoretically, the more serious an injury, the greater should be the value of the plaintiff’s case.

         ix. Objective evidence of injury.

    Injuries that can be visualized or that are able to be demonstrated by radiographic evidence such as x-rays, MRIs, CAT scans or other scientific tests, will normally result in higher settlements than injuries which depend upon the believability of the plaintiff to prove.

    There are many injuries which may have severe consequences for the plaintiff which are not diagnosable by objective tests. This can include severe back problems, headaches and pain anywhere in the body. Experience has shown that jurors are hesitant to award large damages in cases in which there is no objective evidence of injury; thus, the settlement value of any case is increased by objective evidence of injury and decreased by the lack of it.

    However, a credible plaintiff can sometimes overcome the lack of objective evidence of an injury and this must also be taken into consideration in the right case.

         x.  Past and future medical bills of the plaintiff.

    As long as a plaintiff can establish that past medical expenses and likely future medical expenses are reasonable and related to their injuries, the bills will be an important consideration in settlement.

    However, the defense will generally claim some amount of overtreatment and, thus, some portion of the medical bills should be excluded from settlement consideration. Further, the defense will argue that plaintiff will be unlikely to need or have the claimed future treatment and/or the future treatment would not be related to the subject incident.

         xi. Past wage loss and future wage loss.

    Wage loss is another important consideration in evaluating a claim as long as plaintiff can establish that he or she was reasonably off work or will be reasonably off work due to the subject incident. The defense will likely take the position that the amount of the wage loss should be discounted because plaintiff should have been back to work sooner and, in the case of future wage loss, the defense will claim that plaintiff could be doing some type of work which would pay them as much or almost as much as the work they were doing before the incident.

    Also, for plaintiffs who are self-employed or do not have a strong consistent earning history before the accident/incident, it can become very difficult to establish a wage loss claim.

         xii.Is the injury permanent.

    In cases in which plaintiff has a permanent injury and some objective evidence of that injury, there will likely be a higher settlement value because the case will have more jury appeal.

         xiii.    Venue (where the claim will be tried).

    It is beyond question that cases tried in certain locations, particularly urban locations, result in much higher verdicts than cases tried in more rural counties. This is a factor that must be taken into consideration in settlement.

         xiv.Policy limits and defendant’s assets.

    No matter how severe the injury, the plaintiff’s ability to recover damages against defendant will be limited by either the defendant’s policy limits or the personal assets of the defendant.

    However, in cases involving motor vehicles, the plaintiff may have his or her own uninsured or underinsured motorist insurance which would provide additional coverage for the plaintiff’s injury and allow the plaintiff to receive further compensation in a settlement with their own insurance carrier.

         xv. Target defendants.

    Even though jurors are not supposed to consider the wealth of a defendant or whether or not the defendant is a corporation in their verdict, they are far more likely to make larger awards against large companies than they are people who they perceive to be middle class or poor. So this becomes another important settlement consideration.

         xvi.Reputation and ability of attorneys.

    The claims representative or defense attorney will report to the insurance carrier or defendant the ability of the plaintiff’s attorney and the likelihood that the attorney will try a case and try it well.

    In situations in which the defense believes that the plaintiff’s attorney will not be willing to take the case to trial, there is little incentive to offer a significant amount of money in settlement.

    On the other hand, if the defense believes that a plaintiff’s attorney will not only go to trial, but will receive an optimum verdict, the defense’s risk is increased and thus the settlement value of the case is increased.

    By the same token, plaintiffs must also take into consideration the reputation and ability of the defense attorney. If the case is against a good defense attorney, plaintiff will likely receive less money from the jury; thus, the settlement value of the case, to some extent, is decreased.

         xvii.    Expense of litigation.

    The expense of litigation should also be considered in settlement. There are some cases which, if worked up properly, could result in the expenses actually being higher or almost the entire amount of an eventual settlement or verdict.

    Some insurance companies and corporations are cost conscious and will take into consideration the expense of proceeding in the case versus early settlement.

    However, just because a case may cost the defense $200,000 to litigate does not mean that in a case they otherwise evaluate as being worth $25,000, they are going to offer the plaintiff $200,000 in settlement.

    Rather, in the above example, it may cause the corporation or insurance company to raise their offer five or ten thousand dollars or to try to settle the case early for $25,000 before expenses are actually incurred. Corporations and insurance companies are loathe to make offers of settlements based on the cost of defense because of a concern that they will be seen as an easy target for plaintiffs.

1. Most legal questions require complex answers. The answers provided here may not be complete or fully accurate but attempt to provide consumers with abbreviated answers. For more detailed answers to these questions, a consumer should check out other articles in this section of this web site, research other legal articles and texts on the subject matter or consult with an attorney.