Do I Need a Lawyer for a Car Accident Settlement?

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If you have been injured in a car accident, at some point you will want to consider whether or not you will need to retain an attorney to help you settle your case. Hiring an attorney can be beneficial, mainly because a lawyer will be more knowledgeable and experienced in negotiating with insurance companies. However, there is a cost associated with an attorney’s service, and that cost needs to be balanced against the fact that an attorney with experience in car accident settlements usually can get you more money than you would end up with on your own. This article will discuss whether or not you need an attorney to help you negotiate a car accident settlement.

Fee Arrangements: What’s It Going to Cost Me?

When thinking about hiring an attorney, the first question on everyone’s mind is usually, “What’s it going to cost me?” Generally, personal injury attorneys work on a contingency basis. This means that, if you receive a settlement or judgment in your favor, the attorney will charge you a percentage of the net recovery (after the attorney is reimbursed for costs).

Typically, this percentage is between 25% and 40%, depending upon when the case resolves. For example, an attorney may charge 25% if the case resolves before the lawsuit is filed, 33% if the case resolves a certain number of months before trial, and 40% thereafter. Each state has its own bar association which regulates the attorney-client relationship, including limitations on how much an attorney can charge.

Determining the Value of Your Claim

In order to settle your claim, you must first determine the value of your claim. Do this by calculating your damages. There are two types of damages: (1) special damages and (2) general damages.

  • Special damages. Special damages (or economic losses) are damages for which money is a comparable substitute for what was lost. This is also known as the "out-of-pocket loss" rule. Special damages can include lost wages, lost earning capacity, medical expenses, and vehicle damage.
  • General damages. General damages (or non-economic losses) are losses for which money is only a rough substitute. General damages include physical pain and suffering, humiliation and embarrassment, shock and mental anguish, loss of reputation, loss of consortium, and loss of society and companionship. Typically, general damages equal 1.5 to 5 times special damages, depending upon the severity of the injury and the level of culpability on the part of the person who caused the injury. The more permanent and severe the injury, the greater the general damages.

Calculating your damages can be difficult, particularly general damages since, by definition, money is only a rough substitute. Learn more about settlement formulas in car accident cases.

Paying for Costs

One of the biggest advantages in hiring an attorney is that the attorney will usually advance most, if not all, of the litigation costs. Personal injury cases can be expensive because they are very fact-driven. A lot of time and money must be spent to properly build a case. To build a case, attorneys rely on doctor’s reports and discovery tools like depositions and interrogatories.

An attorney may also retain an expert witness. Expert witnesses can be costly, especially if they have to testify at trial. An attorney usually works with a network of doctors and experts who can provide their service at no cost to you initially. Instead, they will take a lien on your case and will be paid from any settlement or judgment.

Gathering Evidence

Attorneys also play a crucial role in gathering evidence. As stated above, personal injury cases are very fact- specific. An attorney experienced in handling personal injury claims will know what types of facts to cultivate in order to prove up your case and provide you with the a fair settlement.

The Threat of Jury Trial as a Bargaining Chip

Most car accident cases settle. This typically occurs before trial, by way of negotiations between you (or your attorney, if you are represented) and the insurance company. However, an insurance company’s primary incentive to settle a case is the threat of a large jury trial award in your favor. If there is no threat of jury trial, then the insurance company can delay settlement or offer a low amount. An experienced and reputable personal injury attorney can convince an insurance company to settle well before trial.

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