In a settlement, there is always paperwork. Before you agree to a settlement offer, you and your lawyer will discuss whether you understand and accept all of the terms and conditions of the settlement. The insurance company for the at-fault party will ask you to accept money in exchange for your agreement to end the case — releasing the at-fault party from any future responsibility.

First and foremost, you and your lawyer will discuss whether the amount of the offer is reasonable under the circumstances. Your lawyer should be able to give you a professional opinion on this, weighing the likely outcome of a trial against the certainty and benefits of settling now. Rejecting one settlement offer does not mean you will never get another. In fact, some defendants even expect to go through several rounds of offers and rejections.

Another consideration is any debt, claim or lien that you might owe to health care providers or other parties because of the accident. (We will discuss and define liens in the next section.) If the settlement offer is not sufficient to pay all of these debts, you may be liable for the rest. Sometimes, your lawyer can help by negotiating or using other remedies available under the law to make sure all of your obligations are covered. Depending on the circumstances, your lawyer might be able to convince creditors to take a lesser amount in exchange for immediate payment. But because this is an uncertain process, it is important to discuss your debts and obligations with your lawyer when analyzing a settlement offer.

At this stage, your lawyer may also talk to you about subrogation, which we discussed in Chapter One. A subrogation claim is a claim that an insurance company or other party has on the money you recover in your case. For example, if you have medical insurance, it probably covered your initial medical care. But if an auto insurance company is legally obligated to cover those costs, the medical insurer may be entitled to reimbursement from the auto insurer or from you, out of any settlement you reach with the auto insurer. Subrogation can be complex and depends on state and federal laws as well as individual contracts. Your lawyer should help you understand how it applies to you.

If you have claims against more than one defendant or insurance company, or are considering a lawsuit over the same injuries against another party, you should also consider whether settling with one defendant could limit or eliminate your right to pursue the other cases. For example, in states with at-fault auto insurance, you may have a claim against your own auto insurer for available uninsured/underinsured auto insurance claims. (Much more about insurance can be found in Chapter One.) Many states require you to notify other parties if you settle with one. If you fail to follow this or other laws, you may lose your right to pursue your other claims.