Understanding California Personal Injury Settlements

Understanding Personal Injury Settlements

If you have been in an accident and suffered injuries as a result, you can recover for your injuries in primarily one of two ways: 1) you can litigate your civil claim in court; or 2) you can come to a settlement agreement with the opposing party outside of court.

At O'Grady Law, we will fight tooth and nail for your legal rights and see your case all the way through the end of the litigation process, but we are ready and willing to come to an agreeable settlement in the event that such settlement would be advantageous for you, the client.

Bear in mind that by aggressively pursuing litigation, the defendant is incentivized to make a better settlement offer. The more that a defendant fears the ramifications of a civil lawsuit in court, the more likely that they are to make a satisfactory settlement offer.

The vast majority of cases are settled, and most estimates recognize settlement occurrence at greater than 90% frequency. Settlement can be a great thing for all parties. It avoids the delays, costs, and frustrations often associated with a long civil litigation and court process, and may lead to a more amicable relationship between involved parties. For these reasons - and others - settlement is encouraged by California courts.

Mechanics of Settlement

A settlement offer is made by either the defendant or insurer to the plaintiff. The crux of the settlement offer is that if the plaintiff accepts the money, the case will be dropped.

Settlement offers may be made even before a lawsuit has been filed. For example, a defendant in a car accident situation may make a preliminary settlement offer to avoid the stress and cost of future litigation.

Settlement offers may also be made at any time throughout the lawsuit, until the final verdict of the jury/judge is returned.

If you accept a settlement offer, then you must agree to a complete waiver of all claims against the defendant. As such, you can no longer sue the defendant for the relevant claim, even if you later decide that the settlement offer was unsatisfactory in some way.

Suppose that you accept a settlement offer for $100,000 in relation to a trip-and-fall injury. As part of the settlement agreement, you agree to drop all claims. You later decide that your injuries are more significant than you originally thought. You cannot re-open the case and sue for additional funds The case is closed.

Benefits of Settlement


Because settlement agreements operate as a "final action," they introduce a greater level of certainty to personal injury proceedings. The defendant and plaintiff both benefit from this certainty.

Suppose, for example, that a defendant and plaintiff reach a settlement agreement in a car accident injury case. The plaintiff is likely to be successful in their claims (based on the available evidence), but there is some uncertainty as to the damages amount that the jury will award. The plaintiff is hoping for $100,000, but the jury may decide to award the plaintiff only $50,000, or even less. Plaintiffs cannot predict the actions of the jury perfectly.

Rather than accepting the uncertainty of receiving a much lower damages amount award, the plaintiff may decide to accept a settlement agreement with the defendant for $75,000 - less than the ideal $100,000, but more than the lower-end of uncertain outcomes.

Lower Legal Costs

Though plaintiffs (here at the O'Grady firm) do not pay except on a contingency basis, defendants may want to avoid risking the delay and cost of court litigation. Defendants generally pay hourly for counsel, which means that the longer a case goes on, the more expensive it becomes to litigate. Defendants are therefore incentivized to make quite substantial settlement offers, if only to avoid the cost risk of a lengthy litigation.


Settlements can be kept private - the agreement itself is likely to include confidentiality provisions protecting the content of the agreement and the relevant evidence and actions of the parties. Court litigation, on the other hand, is a public matter, which means that a great deal of sensitive information may be leaked to the public (from medical/psychiatric records, to family issues, to legal history, business issues, etc.). Settlements are a great way to avoid excessively public litigation in matters involving sensitive information.

Quicker Resolution

Oftentimes, plaintiffs do not want to be involved in a yearlong (or longer!) litigation over an accident. They simply want to recover some damages and leave the incident behind them. For such plaintiffs, a favorably negotiated settlement provides an opportunity to avoid the risk of lengthy litigation. Of course, a settlement must be adequately "worked" before a final agreement is reached. The key to ensuring that a settlement offer is satisfactory is to have a winning argument that the opposing side fears would win in a court of law. With the threat of a plaintiff success looming over their heads, the defendant is incentivized to make a much more favorable settlement offer.


Settlement agreements demand the skills of an experienced personal injury attorney who understands what it takes to formulate a strong injury claim and subsequently negotiate a favorable settlement. For a free consultation with a very experienced San Jose personal injury attorney, call the Law Offices of Brian O' Grady at (650) 318-6131 to set up your appointment today.