A claim can be settled at many different points in the process. People are surprised that a claim can be settled pre-suit, that is before a formal lawsuit has been filed in the court. They can indeed.
In this blog, I’d like to talk about the need, often, for filing suit. Why is it that your lawyer may feel that he/she has to begin the court process. Sometimes a lawyer just does not have enough information to make a reasonable, professional judgment about whether the case can be resolved. There could be several defendants out there, there could several people or entities responsible for the accident or injury. In many scenarios, there are several defendants or it is believed that there will be several. It just may not be known at the outset because the facts in the lawyer’s file may still be too sparse.
At other times the facts could be more straightforward but the defendant, the person who is being sued, fails to turn a claim letter over to an insurance company. Since it really requires an insurance company to have the case resolved, a lawsuit will have to be started. That should, in the vast majority of cases, elicit who the insurer is.
The two above issues result in a lawsuit but for different reasons: the facts, or lack of them, sometimes require a lawsuit and, secondly, there may be sufficient factual information but no real information about insurance coverage.
Sometimes a third reason occurs. This is when as a matter of practice or a matter of strategy, the lawyer can feel that the insurance company, where one is ascertained, will not take the case seriously unless the plaintiff’s lawyer, the lawyer on behalf of the injured party, begins the lawsuit process. That is yet a third reason why a case may result in a formal filing of a lawsuit. Theoretically cases can be resolved before a suit, but these three reasons listed here may well necessitate a lawsuit.
What shouldn’t be forgotten is that you can learn things during the course of discovery. The perceptions of the major actors will often only be learned after depositions. Depositions are testimony of a witness with attorneys present. The witness is under oath and a court reporter takes down the testimony. The point to remember is that this kind of formal discovery of the adverse party- and probably even some informal discovery- begins only when a lawsuit is filed. You can also do that to alert yourself to additional defendants.
There are often multiple defendants, multiple people/entities responsible. Remember when we have spoken about the need for proximate cause, we have said that a defendant need only be “a substantial contributing cause” in the injury. Thus, a substantial contributing cause can be found in the conduct of several defendants. Sometimes this will only become apparent after the rough and tumble of what is called discovery in a lawsuit.
There are those times that you will resolve a case against one defendant but not resolve it against one of the remaining defendants. That would occur in a multi-party case, as you’d expect. In that scenario, you settle with one defendant but not all of them. Usually there should be limiting language in the release, explicit language to let you preserve your action against the remaining defendant(s). A special motion should be brought to the Court under one of the Rules of Civil Procedure, Massachusetts Rule 54, to settle the case against one, but not all, defendants. But, again, this will only come about after the lawsuit has been filed.
In sum, there may be good reasons to settle a case at the claims stage, but there may be better reasons to settle the case after, even well-after, a lawsuit has been filed, if it is settled at all.
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