I find myself coming close, at times, but I am always careful to point out that I cannot predict a legal result with certainty.
This problem comes up regularly when I meet with prospective clients.
Most of them have been presented with a settlement offer by the insurance company, so they are faced with a decision—do they accept the offer or put their case into a lawyer’s hands?
Accepting the offer gives them a sure and guaranteed result. They know exactly how much compensation they will receive.
Hiring a lawyer brings about uncertainty. It comes with significant expense, and there’s no guarantee that the end settlement or trial result will be any higher than what the insurance company has already offered.
In fact, there’s no guarantee that the end settlement or trial result will be even as high as the amount offered.
The expense is, indeed, significant. Up to one third of their rightful compensation will end up paying the lawyer’s fees.
On top of that, there is all the legal expense that is incurred for medical records, medical reports, court registry fees, etc.
By making the offer, the insurance adjuster has given one view about the value of the case. Is that the correct view?
Anything the lawyer says has to be taken with a grain or two of salt. After all, this is a businessperson who wants to get clients.
What makes the decision more difficult is that the lawyer can’t give any certain answers. I can never guarantee you will be better off by hiring me. No lawyer can.
As I’m typing this, I’m wondering how it is that anyone decides to get me on board.
While I cannot give any guarantees, I can tell you some of the factors that go into evaluating the value of a claim, and give you my opinion, if I think such is the case, that an insurance company’s offer is woefully unfair.
As for my one third fee and legal expenses, I can tell you that no one has ever ended up with less in his or her pocket than an insurance company’s last, best offer, even after paying those amounts.
That’s nothing special. I expect that it is exceedingly rare that a crash victim ends up worse off with a lawyer. Insurance companies make that easy with their low ball tactics.
Lawyers are held to a very high ethical standard. I don’t believe that any lawyer would try to convince you to hire him or her just to get a fat fee, in circumstances when an insurance company has taken the exceptional step of making a fair offer to an unrepresented claimant.
It’s not just when the lawyer is hired that the lack of certainty rears its ugly head.
The more serious decisions are made well into the claim process when settlement offers increase.
As time goes by with a claim, settlement offers start coming with consequences.
The court system is run by a set of rules. One of those rules is designed to encourage claimants to accept reasonable settlement offers.
Under that rule, if you go to trial and the judge or jury awards no more compensation than the insurance company’s offer, then you end up paying a whole lot of costs to the insurance company.
This rule applies only to offers that are made in a special way, which are referred to in the business as “formal” offers.
With the potential of insurance company costs being tens of thousands of dollars, the failure to beat a formal offer can result in the claimant actually owing money if the trial result is a modest one.
Once again, while your lawyer can provide his or her best opinion, he or she cannot provide anything of a guarantee.
The higher the offers get, the less chance there is that a better result could be achieved at trial, and the more pressure there is to settle.
While we do our very best when giving our opinions, lawyers can be wrong.
I recently settled a case where a formal offer was made approximately a year earlier. With the information I had at the time, I gave my opinion that we should be able to beat the offer at trial and I advised against accepting it.
During that year, examinations for discovery were conducted and medical opinions were obtained, all at considerable expense.
Armed with the new information, I changed my opinion of the case.
I was no longer confident that we could beat the offer at trial. My client followed my new advice and accepted the offer, ending up with less compensation in her pocket she would have had the case been settled when the offer was first made.
The really fun thing about this case, however, was that the lady ended up with more than eight times the amount of financial compensation in her pocket, after paying legal fees and expenses, than the insurance company’s offer was before she hired me.
A lawyer’s opinion can turn out to be wrong. Most times, however, it turns out to be right.
Published December 30, 2007 in the Kelowna Capital News