What Happens If You Refuse a Settlement Offer?

When faced with a legal issue, one of the choices you might encounter is whether to accept a settlement offer. This decision holds substantial weight over the financial outcome of your case.

The choice to refuse a settlement offer can lead to a range of consequences, from potentially securing a more substantial compensation through further negotiations or at trial to the risk of ending up with less—or even nothing—if the trial doesn’t go in your favor.

Therefore, spend some time finding out about the consequences of refusing a settlement offer, as they will not only influence the immediate financial aspects of your situation but can also shape your financial stability and peace of mind in the long term. Consulting with a personal injury lawyer can provide valuable insights and help you make informed decisions regarding your legal options.

Schedule a Free Initial Consultation Today!

What is a Settlement Offer?

A settlement offer is a proposition from one party in a dispute to the other, aiming to resolve the matter without needing a trial. This happens across personal injury cases, employment disputes, and commercial litigation.

Settlement offers come at any point during the legal process, from the early stages of a dispute to the aftermath of a trial.

Why Would One Party Offer a Settlement to the Other?

Settlements often serve beneficial purposes for both parties involved:

• Risk Management: Trials are inherently unpredictable. Even with a strong case, the outcome can never be guaranteed. One party can manage the risk of an unfavorable or unexpected trial verdict by offering a settlement.
• Cost Savings: Legal proceedings are expensive. It is not just in terms of money but also time and resources. Settlements can be a more economical option, reducing legal fees and other expenses related to a drawn-out court case.
• Control Over Outcome: Settlements allow the parties to control the resolution directly. Unlike a trial verdict in the hands of a judge or jury, a settlement is mutually agreed upon, providing a sense of certainty and control.
• Confidentiality: Some disputes may involve sensitive information that parties prefer to keep private, like divorce settlements, trade secrets, or health records. Settlements can often be kept confidential, whereas trials are typically public.
• Preservation of Relationships: In cases where the parties have an ongoing relationship, such as business disputes, a settlement can help preserve a working relationship. Trials can be contentious and damaging to long-term relationships, as the very nature of a trial is adversarial. Each party presents arguments against the other, often highlighting faults, negligence, or wrongdoing. This can create or deepen animosity and distrust between the parties.
• Immediate Resolution: Legal disputes can be lengthy depending on the case’s complexity, the discovery process’s length, or court scheduling and delays. A settlement can provide a quicker resolution, allowing parties to move on without litigation’s prolonged stress and uncertainty.
• Public Image: For companies or public figures, the public nature of trials can negatively impact their public image. Settlements can help manage public perception by resolving disputes quietly.

Why Would You Refuse a Settlement Offer?

Refusing a settlement offer might sound counterintuitive, especially if you’re eager to finish your case. However, there are several reasons why you might consider this option.

Low Offer

The most common reason for refusal is that the offer is too low.

It might not adequately cover your losses or damages:

• Direct Costs Not Fully Covered: Settlement offers might not account for all direct costs like medical expenses, repair costs, or lost income.
• Overlooking Future Expenses: In cases with long-term impacts, offers may neglect future medical care costs, ongoing rehabilitation, or the long-term financial implications of lost earning capacity.
• Neglecting Non-Economic Damages: Important aspects like pain and suffering, emotional trauma, and reduced quality of life in personal injury cases might be inadequately addressed.
• Legal Fees and Costs: Often, offers do not compensate for the legal costs incurred, potentially leaving you to cover these expenses.
• Ignoring Punitive Damages: In situations where the other party’s actions were especially harmful or egregious, punitive damages might be relevant. These are damages awarded in addition to actual losses intended to punish the defendant for their conduct and deter similar behavior in the future. However, lower settlement offers may not adequately reflect the potential for punitive damages, overlooking their role in providing justice and holding the offending party accountable.
• Initial Offer as a Starting Point: The first offer is often a negotiation starting point. It might be lower than what the party is willing to pay.
• Valuation Differences: Disagreements over the value of a claim can result in a lower offer, stemming from different views on liability or damage extent.

Confidence in Your Case

Choosing to go to trial instead of accepting a settlement offer is often influenced by your confidence in the strength of your case. This confidence can stem from:

• Strong Evidence: Having substantial evidence supporting your claims or disproving the other party’s defense can strengthen your confidence in achieving a favorable outcome at trial.
• Clear Liability: In situations where liability is clear and indisputable, you might feel more confident about the success of your case in court.
• Legal Precedents: Awareness of similar cases or legal precedents where verdicts have favored situations similar to yours can also boost confidence.
• Expert Testimonies: Having credible experts ready to testify on your behalf can strengthen your case. Their professional insights can provide clarity and authority to your claims.
• Legal Counsel’s Opinion: Based on their experience and understanding of the law, your legal counsel’s perspective can significantly influence your confidence. If your lawyer believes in the strength of your case, it can encourage you to pursue a trial.
• Potential for Higher Compensation: If the settlement offer is significantly lower than what you believe can be awarded at trial, considering all aspects of damages, you might be inclined to take your chances in court.

However, balancing this confidence with a realistic understanding of the risks and uncertainties inherent in any trial is important. Trials can be unpredictable, and even strong cases can face challenges.

Legal advice from a lawyer can help you evaluate whether this confidence in the case is well-placed and assess the risks versus the potential rewards of going to trial. After carefully evaluating all the factors involved, this decision should be made, ensuring that it aligns with your best interests and legal objectives.

Principal Considerations

Sometimes, it’s not just about the money.

You might want to go to trial to hold the other party accountable or to set a precedent.

• Holding the Other Party Accountable: One of the primary reasons to opt for trial over settlement can be the desire to hold the other party publicly accountable for their actions. This is particularly relevant in cases where the defendant’s actions were harmful, unethical, or illegal.
• Setting a Legal Precedent: Going to trial can set a legal precedent, which is especially important in cases that can impact similar situations in the future. Winning such a case can help establish new legal standards or clarify the interpretation of existing laws.
• Seeking Justice: For many, the legal process is about seeking justice, not just receiving a payout. Going to trial can be a way to ensure that the whole story is heard and judged, particularly in cases with significant moral or ethical implications.
• Public Awareness and Change: Some cases have broader societal implications. Taking these cases to trial can bring public attention to important issues, potentially leading to societal change or policy reform.
• Personal Closure: For some people, going through a trial is necessary for emotional closure. It can be a way to process the incident, confront the other party, and gain a sense of finality.
• Deterrent Effect: A trial and a subsequent verdict can deter the defendant and others from engaging in similar conduct.
• Validation of Experience: A trial provides a platform to validate the experiences and suffering of the plaintiff, which can be especially important in cases like discrimination or personal injury.

While these reasons emphasize the importance of principles over financial gain, it’s important to consider a trial’s emotional and financial costs. Make the decision to pursue a trial for moral reasons with a complete understanding of the potential impact on your life and well-being. Legal guidance can ensure your decision aligns with your values and best interests.

The Role of a Personal Injury Lawyer

The best way to know whether to accept a settlement offer and the implications of rejecting an offer is to review the offer with your personal injury attorney. Here’s how a lawyer can help you decide whether to accept a settlement offer:

Assessment of the Offer

A lawyer will assess whether a settlement offer is fair and aligns with what you rightfully deserve.

This assessment involves:

• Comparing Damages and Offer: Your lawyer will compare the amount offered with the damages incurred. It includes a detailed evaluation of your medical expenses, lost income, pain and suffering, and other losses.
• Understanding the Legal Framework: A lawyer will be well-versed in the legal standards and precedents relevant to your case, which allows them to evaluate the offer in the context of what is typically awarded in similar cases.
• Risk Assessment: A vital part of a lawyer’s assessment is to weigh the risks of going to trial against the settlement offer. They can estimate the likelihood of a more favorable verdict versus the certainty of the current offer.

Legal Advice

A lawyer provides valuable guidance on the advantages and disadvantages of accepting or refusing a settlement offer:

• Objective Perspective: They offer an objective viewpoint, helping you see beyond the immediate emotional response to the offer.
• Understanding Long-term Impacts: Their advice includes considering the long-term implications of the decision, both financially and personally.
• Clarifying Legal Implications: They help in understanding the legal implications of accepting the offer, such as any rights you might be waiving.

Negotiation Skills: Seeking a Better Deal

If the initial offer is low, a lawyer can negotiate for a better deal:

• Advocating Your Position: They have the skills to effectively advocate for your interests and argue why a higher settlement is warranted.
• Strategic Negotiations: Lawyers understand the strategies and tactics that can be used in negotiations to reach a more favorable outcome.
• Communication Skills: They are skilled at communicating your demands clearly and persuasively to the other party.

Preparation for Trial

Should you decide to refuse the offer and proceed to trial, a lawyer’s role becomes even more critical:

• Building a Strong Case: They will gather evidence, prepare legal arguments, and develop a strategy tailored to your case.
• Savvy Representation: Their experience with court procedures and litigation ensures that your case is presented compellingly and professionally.
• Handling Complexities: A lawyer can handle the complexities of the legal process, from filing motions to selecting juries and cross-examining witnesses.

In each of these roles, a lawyer’s skill and experience can significantly impact the outcome of your decision to accept or refuse a settlement offer. Their guidance is about legal procedures and ensuring that your rights and interests are effectively represented and protected throughout the process.

Final Thoughts

Refusing a settlement offer is a big decision with many legal and financial implications for your case. Considering all aspects and potential outcomes before agreeing to a settlement offer is wise. A lawyer can guide you through this process, offering advice and representing your interests.

Remember, each case is unique. Base the decision to accept or refuse a settlement offer on your specific circumstances, with the help of a legal professional.