Part 2: More Tips for Settling Product Liability Cases...
In Part 1: Negotiating Product Liability Lawsuit Compensation, we gave an example of a product liability claim and gave a few strategies on how to negotiate your own claim. Here we continue with more tips to help in your product liability negotiations...
The insurance business is just that - a business. It's a business created to make a profit and must answer to its shareholders. As nice as the Adjuster may seem, when negotiating she won't give away one dollar more than is absolutely necessary. There's nothing inherently wrong with that, but make sure you realize it from the beginning.
If negotiations have begun, the insurance company probably already accepted at least some liability for the actions of their insured.
In our previous example Susan's medical bills will most likely be paid without much argument. From there it will be an uphill battle. Her parents want compensation for Susan's past, present, and future pain and suffering. This must take into account the trauma the facial scarring caused and will continue to cause for a long time.
It's extremely difficult to get proper compensation for cases with disability or permanent injury. Susan's parents should hire an attorney since the facial scarring could turn out to be permanent.
Before going into settlement negotiations you need to figure out what you really want for compensation. When you begin you'll be starting at zero and you'll have to fight for every dollar you can get.
If the manufacturer's insurance company has already accepted liability there will be little if any need to negotiate the actual medical bills (also referred to as "Hard Costs"). From there the difficulty will rise proportionately with each additional dollar you try to obtain.
You'll need some negotiating skills to work with the adjuster and come up with a settlement amount you both can live with. Knowing when to bend and when to stand strong is essential to any good negotiator, whether attorney or not. Don't be insulting or too abrasive. Being professional and staying calm will go a long way toward a fair settlement.
The Adjuster has what are called "Limits" or "Authority". Limits are pre-determined amounts of compensation set by the Adjuster's supervisor before negotiations begin. The Adjuster does not have to tell you her limits but she might if she thinks it will help settle the claim.
You can ask the Claims Adjuster what her "authority" is. She may not tell you, but by asking she'll know you've done your homework. After reading through this site you'll know more than she thinks you do about these types of negotiations. She definitely won't offer anything close to her limits in the beginning. If you and the Adjuster get to a stalemate and you're still demanding more then the Adjuster has authorization to give, then she may tell you.
Remember, Adjusters are paid to adjust and settle product liability cases. That's an advantage for you. An Adjuster who can't settle a personal injury claim with a non-attorney will not be an Adjuster very long.
Never imply or invite collusion of any kind. There are numerous examples of injury victims misunderstanding something an Adjuster said and using it as a chance to offer a bribe or some other illegal payment arrangement. If that occurs the negotiations will come to an abrupt halt and you'll soon receive a letter from the insurance company's legal department.
After that happens, any hope of settling your case without a personal injury attorney is gone. You're probably smart enough never to engage in such behavior, but be warned of the consequences if you do.
It's extremely important to communicate to the Adjuster how the injury affected you on an emotional level.
In our previous example, facial cream caused severe pain to Susan's face and possibly permanent scarring. Her parents must explain how the scarring now and into the future is going to affect Susan. They should include things such as:
There could be many more negative feelings and emotional devastation from something as awful as facial scarring. Feelings like these are certainly not commonplace and should be compensated.
In your product liability case you must be able to convey powerful emotions to the Adjuster. This is how compensation for pain and suffering is won.
While recovering it's critical you keep receipts for all your out of pocket expenses. These might include: prescriptions, over the counter medications, bandages, and even costs like doctor or hospital parking lot fees. Keep all your bills and receipts organized. You'll need to reference your paperwork often throughout your product liability claim negoatiations.
Weeks, perhaps months will pass as you continue to recover and treat your injuries. Be patient, personal injury claims are rarely settled quickly.
While recovering, the Adjuster will collect medical updates from your treating physicians (she'll also be working on other product liability cases). During recovery your medical bills will continue to grow.
When attorneys represent clients in this position they send what are called "Letters of Protection" or "LOP's" to medical and other creditors. This stops medical bills from piling up (along with collection letters, harassing telephone calls, and the like).
Letters of Protection are legal agreements between attorneys and medical creditors. An attorney guarantees payment to the medical creditor first when the settlement funds are released, even before paying any money to the client. In return, the medical creditor agrees to wait to be paid without sending their client's bills to collections.
Of course, clients agree to the LOP's as part of their personal injury attorney's contract. In addition to LOP's, injury victims with skilled personal injury lawyers representing them have:
Unfortunately an injury victim representing herself will have more difficulty getting medical creditors to agree to withhold billing until the case is settled. Although a non-attorney can ask medical creditors to agree to LOP's, the conflict of interest makes it difficult.
When nearing the end of treatment and sending your demand for settlement, contact your employer and request a letter confirming the amount of wages you lost, starting from the date of your first doctor's visit.
There's no format or special form for doing so. The wage information should be on your employer's letterhead and as detailed as possible. It must also be signed by your supervisor or someone in management (the more seniority the better).
In Susan's case her parents should submit any wages lost while tending to their daughter and her injuries.
At this point it's time to ask your treating physician for a Final Medical Narrative, including the original Diagnosis and Final Prognosis.
The Diagnosis will detail the extent of your original injuries.
The Prognosis will detail the lasting effects and limitations of the injuries combined with your required medical treatment then, now, and into the foreseeable future.
In our example product liability case the prognosis will include the probability of future plastic surgery to Susan's face.
Here's the basic process from the beginning, using our previous example:
Susan's parents add up all of Susan's medical bills. For the moment they put aside the out-of-pocket expenses and proposed costs for Susan's future medical bills.
Once they add up all the Hard Costs (i.e. medical bills) they must decide how much they feel is a fair settlement for Susan. The amount can be arrived at in any number of ways. There's no exact science or set amount for settlement compensation. A lot of what goes into settlement negotiations is subjective.
The "Rule of Thumb" for settlements is taking the Hard Costs and multiplying them by 1x - 5x, on average. That multiple can go about as high as the seriousness of the injuries take you, in some product liability cases it could be 100x or more.
For example, a case resulting in paraplegia could win $3 million or more (cases involving permanent injury or death require the expertise of a skilled personal injury lawyer, DON'T try to handle those cases on your own).
You may be wondering when to factor in the possible permanent scarring, pain and suffering, future medical bills, plastic surgery and other still unknown costs. There is no real way to do that. The amount would merely be a guess. That's what the multiples are for. The higher the multiple the more sure you can be that your bills will be paid.
There's no reference guide you can use to determine pain and suffering or mental anguish. It's one of the most difficult parts of settlement negotiations, and one in which the Adjuster has the upper hand.
About as close as you can come to a reference guide for the value of pain and suffering is researching court records, either at the courthouse or online, or both. You want to see the amount juries have awarded victims in cases similar to yours. If you do, make sure to look at jury verdicts in your state and especially your local counties. You'd be surprised at the disparity in verdict amounts from one state to another, and even from one county to another.
Let's take Susan's product liability case...
Her actual medical bills have totaled $25,000 dollars, her parents' out of pocket expenses $3,000, and their lost wages to date are $5,000.
So the actual amount Susan's parents asked for in the settlement of their daughter's case breaks down like this:Hard Costs (Medical Bills) = $25,000.00 x 5 = $125,000
You may be wondering about adding an additional amount for Susan's pain and suffering. Well, they already have. The multiplication of Hard Costs x5 is meant to include an indeterminate amount for pain and suffering. It's compensation for the subjective pain Susan already suffered and will suffer into the future. It also includes future lost wages and out of pocket expenses.
Be prepared to communicate your demand to the Claims Adjuster. Make sure the Adjuster confirms by email or in writing that she received your demand.
Don't enter negotiations presuming anything. You already know the Adjuster doesn't have to pay any amount of compensation for pain and suffering. The only real leverage you have is the threat of hiring an attorney and filing a lawsuit.
Starting negotiations thinking you can "jack up the price" of your settlement is foolish and counter-productive. Treat the adjuster with respect and hopefully she will return the favor.
Never say anything which could be construed by the Adjuster as an ultimatum. The minute you say "Take it or leave it", discussions with the Adjuster will likely end and the claim will be forwarded to the insurance company's legal department. Then you'll likely need to retain your own personal injury attorney to continue negotiations.
Here are more tips and strategies on negotiating product liability claims.
If you'd like to see a sample dialogue of an injury victim negotiating with a claims adjuster, check out this page on how to negotiate a settlement.
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