It is sometimes the case with a personal injury claim that the other side will offer to settle a claim early. The main reason for this is that it is simply cheaper to settle a claim quickly, than to let the claim be dragged out. It is important to remember that the other side’s legal department – which will likely be part of an insurer – has overheads. And to minimise the financial cost of a claim, settling early is usually the best option for them.
At the early stages of a claim, this can be very tempting for the claimant. After all, with the possibility of a claim taking several months to process, a quick pay-out can sound reasonable. However, it is important to consider the reason behind why the defendant wants to settle early, and as we previously discussed, the reason is simply that they want to minimise their financial losses. Settling early allows the other side to minimise their legal costs and to offer a lower level of compensation, with the hope that the claimant will bite.
Should I settle early?
The main issue with settling a claim early is that you will be awarded far less compensation than you would be if you waited a little longer. On average, early settlements result in a pay-out some 20-40 per cent less than a standard claim. This means that if you originally claim £10,000.00, the other side may chop off £4,000.00 and make that £6,000.00.
So the question is, if your personal injury claim is strong and £10,000.00 is a fair settlement demand for your injuries, why would you settle for any less?
Following the advice of your lawyer
The best accident company for claims would always advise you to follow the advice of your lawyer if you are offered an early settlement. It is highly likely under the circumstances that your lawyer will advise you to wait a little longer for your claim to go through. It is sometimes the case, however, after receiving a firm ‘no’, that the other side comes forward with a much-improved early settlement offer. If this happens, then it may be in your best interests to take the offer, taking into account your own lawyer’s legal fees. For example, if your lawyer is working on a 15 per cent fee basis, but after a certain period of time that fee rises to 20 per cent, then it may be worthwhile for you to settle your claim early.
Whatever the case, what you do next is up to you. Your lawyer has no say whatsoever with regards to whether or not you settle early. What we will say is that you should follow the advice of your lawyer, because at the end of the day they are working in your best interests.
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