Accepting or rejecting a settlement offer without expert advice could harm your position.
If you have been injured in an accident that was not your fault, this means another party must be liable for your injuries. Often, this party will issue a settlement offer in an attempt to resolve your personal injury case without the hassle and expense of going to court. If you receive such an offer, it is extremely important to have a qualified personal injury attorney such as Fernando D. Vargas review it. Here is why.
Ensure the Offer is Fair
First and foremost, you want to make sure the settlement offer is fair before accepting or rejecting it. This is the most obvious reason to consult an experienced attorney, as your attorney will be able to provide a reliable estimate of the total amount of your damages (including present and future costs) along with an informed opinion about your odds of winning your case in court.
Avoid Risk of Liability for Defense Costs
Another very important reason to hire an attorney to review your settlement offer is that rejecting a fair offer may carry more risk than you imagine. If you reject a fair offer to compromise made under California Code of Civil Procedure section 998, and you do not win your case in court, or you win less than the amount offered in the compromise, you may actually end up having to pay some of the defense’s court costs.
Avoid Forfeiting Prejudgment Interest
An attorney can also assist you in making counteroffers or issuing your own Civil Procedure 998 offers to compromise. This is a very important activity, and it is worth investing in professional help. If you make a fair offer to compromise, the defense rejects this offer, and then you later win a more favorable judgment in court, you not only get your costs paid by the defense, you may also earn prejudgment interest on your settlement. This interest will accrue at a rate of 10 percent per year from the date of the 998 offer until the judgment is satisfied.
Recently, a California Court of Appeal issued a ruling on the topic of prejudgment interest that is important for personal injury plaintiffs and defendants to be aware of.
The case in question was Bean vs Pacific Coast Elevator Corporation. In this case, the plaintiff (Bean) was rear-ended at a red light by an employee of the Pacific Coast Elevator Corporation. The car accident caused Bean to incur serious injury. Bean’s attorney issued a $999,999 statutory offer to compromise, but the defendant’s attorneys rejected this offer and proceeded to take the case to trial. At trial, Bean won $1,271,595 in compensatory damages. This then entitled Bean to another $35,000 in costs.
Initially, the trial court ordered that prejudgment interest should be calculated on the entire amount. However, upon appeal the court determined that this was not correct. Based on the wording of the statute, the court found that prejudgment interest only applies to damages attributable to personal injury. Amounts for property damage, punitive damages, and costs will not be considered.
