Understanding How Defendants and Insurance Companies Act in Cases with Significant Damages

In personal injury cases, it’s important to understand how defendants typically approach a lawsuit.  In many cases, the defendants will have insurance companies, and, because the insurance companies are typically at risk for payment, they will exert a strong influence over the course of litigation. When insurance companies are involved, they will almost never agree to pay fair compensation at the outset.  Instead, their typical tactics include delay and denial.  It is not in their best interest to pay today any amount that can be put off until next year.  Further, by engaging in denial on behalf of their client, they will usually seek to blame others for the cause of the accident, including the victim.

In the following article, our Phoenix personal injury lawyers dive deep into how defendants and insurance companies act in cases with significant damages.

The Continuous Cost-Benefit Calculations Done by Insurance Companies

As litigation progresses, insurance adjustors are in a continuous cost/benefit mode.  In most instances where liability will likely be found against their insured, they try to end a case for the lowest cost possible.  They must weigh the continuing cost of paying lawyers and other experts against their chance of winning at trial.

Will the Plaintiff’s Lawyer Take the Case to Trial?

Insurance companies know well the attorneys who take cases to trial, and those who have outstanding trial skills and who have recovered multi-million dollar verdicts on behalf of their clients.  They also know that many plaintiff lawyers have never had to take a case to trial, despite having practiced for years or even decades.

A reasonable supposition is that outstanding trial lawyers with many successful verdicts will be able to achieve much higher pre-trial settlements than lawyers who have never taken cases to trial, as the ultimate factor for insurance companies in settling a case is the risk that the lawyer will take a case to trial, and that the lawyer will obtain an award much higher than an amount offered in settlement.

The Higher the Damages, the More Likely Insurance Companies Will Fight More

In our firm’s experience covering the past 50 years, insurance companies will spend significantly more time and money defending a case where $10 million is at stake than when $10,000 is at stake.  Their course of action is almost always based upon a cost-benefit determination – if they spend more money (such as by hiring an expert who will present a pro-defendant point of view), will they reduce their damages by more than such cost (such as the expert’s fees)?

The Defining Moment – Can a Settlement be Reached?

At some point, both plaintiffs and defendants will need to make the determination of whether a proposed settlement offer is acceptable, or whether they believe that a better result can be obtained at trial.

Our team of attorneys believe we can provide a substantial inducement at this stage, as our counterparts recognize our trial experience, and know we will not hesitate to try the case of our clients before a jury and let them determine liability and damages. To speak with the team at Begam Marks & Traulsen, P.A. today during a free consultation, contact us.