Awards -v- Settlements

Awards -vs- Settlements

There are only two ways to receive payments from insurance companies: if they do so voluntarily (a settlement), or if we take them to trial and beat them and they are ordered to pay (an award).  While it may seem like a situation of six of one, half dozen of the other, it really is not. Accordingly, the following considerations are important to note with respect to awards and settlements.


First and foremost, the timing of settlements and awards can very greatly.  A settlement can be reached at any time following an injury occurring as a result of a car accident.  It should be certainly noted that an insurance company is never going to pay top dollar on a claim within days of an accident unless the injuries are extraordinarily minor.  However, in some instances and based upon an individual’s goals, it may be appropriate to settle a case even for less than top dollar if payment can be received much sooner as a result of not needing to wait for a trial.

For example, if an insurance company offered a reasonable amount prior to filing a lawsuit, in some instances it may be advisable for a Plaintiff to resolve the case for such sum as opposed to waiting 18 months or more for the chance to receive more given that the claimant might also receive less.

On the other hand, a plaintiff in an automobile accident case is likely looking at upwards of 18 months before a case is submitted to a jury, although the exact amount of time varies widely based upon the jurisdiction and circumstances of the case.      Accordingly, all things being equal including the amount received, (which they are certainly not) it would be better to settle the matter than wait for an award from a jury.


If we knew the answer to this, we never would have to wait – most of this wouldn’t be an issue.  Obviously, if you have an amount on the table or, in other words, your experienced auto accident attorney has gotten the insurance company to offer their absolute top dollar, you know exactly how much you can have at that point.  On the other hand, if the matter is submitted to a jury, no matter how well-presented the case, you never know for sure what a jury is going to award, if any at all.   So the difference here is risk.

In some instances it may be worthwhile to a claimant to risk an amount of money that has been offered for the chance to receive significantly more.  On the other hand some folks believe that a bird in the hand is worth two in the bush, and as long as an offer is in the ball park, it is worth getting the matter resolved.


Another strength of the settlement is that it gives you some control over the payment including when it is received and how it is structured.  For example, awards for compensatory damages like medical bills can have much different tax treatment than awards for lost wages.  When settling a case, what damages an insurance company agrees to pay for can be negotiated just like the amount.  When a case is submitted to a jury, whatever they award is how it will be structured.  So while taxes must be filed and paid appropriately, sometimes a settlement might have better tax implications than does an award.  (For a complete discussion on tax implications of awards, please refer to Taxes, Awards & Settlements).

Also, should you take a case to trial and receive a verdict, that decision can be appealed in certain instances. Accordingly, you might be looking at another 1 to 2 years or even longer depending upon the extent of the appeal process.  Settlements on the other hand are not appealed and as such are once again much less risky.  Having a control over the settlement process can be a big benefit depending on the circumstances and may or may not encourage someone to avoid the risk of trial.

Upside Potential

One big reason to take a case to trial is for the opportunity of a big jury verdict.  You have probably read about extraordinary sums of money that people have won by going to trial.  While these are certainly dramatized by the media, they do happen.  They do NOT happen nearly as often as most people tend to think.  Only the most extraordinary verdicts are generally reported upon, and as such people tend to think that juries are more generous than they tend to be in reality.

However, like many investments, trials are high risk and can be high reward.  And I can guarantee you that an insurance company has never paid way more than what they think a claim is worth just to be nice!  For those who can afford to take the risk or who merely want the opportunity to have their case heard, trial is worth the time and expense.

Time and Expense

Trials are difficult.  They are trying physically and emotionally.  They can include personal and character attacks by opposing counsel on you and your friends and family.  While competent counsel can mitigate some of these issues, they cannot be prevented entirely in all cases.  And even the simplest of trials requires a lot of time and money during preparation.  The toll that trials can take is not worth the potential reward for some.


For all of their practical differences, settlements and awards are both, in their simplest form payment from an insurance company.  Accordingly they also have similarities.  Both will terminate any additional or further causes of action against the same person or company for the same claim.  They also both generally terminate the litigation process, unless some type of appeal is filed as is set forth above.   So once you receive your money, the process is substantially concluded.

Settlement or Trial?

Ultimately, there is no right answer for whether to settle a case, or take it to trial.  Most importantly, you need to have an attorney that is adept at negotiating favorable settlements.  But it is also imperative that you have an attorney that is willing to and does take cases to trial on a regular basis.  If not, something as seemingly meaningless as your attorneys reputation with an insurance company or defense firm could compromise the value of your claim!  Accordingly, the best solution is to sit down with your experienced car accident attorney and determine the best course of action for your individual claim.

The Spokane, Washington Law Firm of Robert Hahn is one of the leading firms in the area of Personal Injury Law. Our personal Injury clients have the peace of mind in knowing that their case is being handled by an experienced Plaintiffs injury attorney. Our aggressive representation and extensive experience has earned the firm of Robert C. Hahn, III, a stellar reputation for excellence in the representation of injured people.  Robert Hahn’s goal is to provide excellent service by a highly experienced lawyer and legal professionals at an affordable fee.

After helping hundreds of injured people ranging from complex litigation to simple settlement of claims in Spokane and surrounding areas, Spokane Attorney Robert Hahn has the background to explain your alternatives and suggest a solution to your injury difficulties.If you are considering hiring a personal injury attorney, make sure that the attorneys you are considering practice in personal injury law because you need a law firm that deals with these issues on a daily basis.

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