How Personal Injury Settlements and Payouts Work

By Mary Haller posted 13 days ago


Most personal injury claims end before even going to trial before a judge and jury. Instead, attorneys for both plaintiff and defendant prefer to reach out-of-court settlements. These are more expeditious and cost everyone less money. However, plaintiffs must have an experienced attorney to negotiate on their behalf.

Here are some ways that personal injury claims can be settled and what happens afterward when a payout happens:

Private negotiations

During private negotiations, a plaintiff and defendant’s lawyers meet in a bid to find a compromise, according to a personal injury lawyer in Kansas City from the Devkota Law Firm. The defendant’s attorneys are typically from their insurance company. While insurers set aside an annual sum they expect to pay in damages, they will not capitulate that easily and will seek to negotiate the plaintiff’s original claim down. 

Therefore, the best personal injury lawyers will go into such discussions with a significant damages claim so that they can cooperate with a defendant by reducing it while still ensuring that they get their clients a good deal. Attorneys may not unilaterally settle a case without their clients’ consent. 

Alternative dispute resolution (ADR)

If attorneys for both plaintiff and defendant cannot reach a settlement alone, they might decide to use a neutral third party to assist. Instead of taking the case to trial, they choose an ADR process, such as mediation or arbitration. These procedures are less formal than a court setting.

An additional advantage of utilizing ADR is that cases reach a resolution more expeditiously. With less time spent presenting and arguing your case, the attorneys’ fees are also considerably lower.


If the parties to a personal injury dispute and their attorneys cannot come to a settlement agreement, their case proceeds to court. Lawyers for the plaintiff and defense lead evidence from witnesses and experts before a judge and jury. 

Once they have rested their cases, jury members retire to consider their verdict. They will determine if the defendant is at fault and how much money the plaintiff is owed if that is the case.

Trials take months or years to reach a court’s docket and may face postponements and disruptions, causing further delays. However, if this is the best course of action prescribed by an attorney, their clients should follow this advice.

Settlement payouts

Some payouts are made as a lump sum, usually when the settlement amount is not that significant. From this lump sum, the plaintiff must pay their attorney’s fees and cover the costs caused by any injuries they incurred. 

Other settlements may be quite substantial and will not be paid out as a lump sum. Once their case is finalized, a plaintiff may request part of the settlement as a once-off payment to settle their legal bills and cumulative medical bills. 

After that, the settlement balance is invested in an annuity account, which pays out a monthly or annual amount. This approach is utilized in significant settlements where a plaintiff can no longer work or has sustained permanent life-altering injuries. It is also an option for surviving family members of a plaintiff who died.

To settle or not to settle?

There is no hard and fast answer to this question as each case includes exceptional circumstances. This is where the advice of a well-qualified, experienced personal injury attorney is invaluable. Attorneys are duty-bound to vigorously represent their clients’ rights and act in their best interests.

If you are unsure of how competently your lawyer is representing you, it might be advisable to seek a second opinion. However, if you research personal injury attorneys beforehand and choose one of the best, the need for this should not arise.