There is a practical component to what a personal injury attorney does. When someone hits you with their car, you have a claim against them, not their insurance company. Their insurance is there to protect them, and they make you a policy limits offer. In WA/OR, far too often, this means $25k. Let’s set aside UIM insurance on this one, as that would be your easiest salvation. But assume you don’t have UIM or have low UIM limits. Let’s say their insurance has offered you their $25k limits and sent you a release to sign that releases their insured (the at fault person) of liability in exchange for their $25k. You don’t want to sign it because they are at fault and owe you more than that. Your attorney is advising you settle it anyway, which might seem counterintuitive.
In this scenario, I do an asset check. I’m looking to see whether this person could pay a judgment against them. Because you can sue that person and get a judgment, but if they can’t pay it, your judgment has no real value. And most likely, you won’t find a lawyer to front costs of litigation on a case where your defendant has no money, so you will be paying a lawyer hourly along the way to go get it.
So, let’s say you have an offer for $25k on the table. Attorney fee is at 1/3 right now and will take $8300. You have maybe $500 in costs and other fees or medical bills, so let’s say you’d net $16k out of this amount. But your case is “worth more”.
The guy that hit you lives in an apartment, is 18, has worked a couple jobs as a server and plays in a band on the weekends. Or he owns a modest home with his wife and they are retired, with a shared car with a loan out on it. They live on Social Security. They have insurance, but not much, and not enough to cover your loss.
Can you sue them? Yes. Should you sue them? Maybe not. So, right now you have $16k on the table. If you sue them, this is how it will go….You will have an attorney that might agree to go to trial on a contingency fee, but with limited insurance money and an assetless defendant, most likely that lawyer is going to want you to pay them hourly to go get that judgment, not to mention costs out of pocket for things like filing fees, service fees, records, deposition costs, court reporters, jury fees, arbitrator fees, expert witness fees, etc. You might pay $15k or more just in costs to get a judgment. So now you have a judgment for $150k let’s say because a jury decided your case was worth $150k. You’ve paid your lawyer $40k to get the case here. Insurance will still give you $25k, but it’s gone to pay your lawyer now, who you still owe more to. So now you have to collect the rest of that money you’re owed from the guy that hit you. Where does that money come from? If someone has a job, you might be able to garnish a wage. You may need to hire a collections attorney to do this. If they own a home, maybe you can file a lien against it. But if they file bankruptcy, you are most likely out completely, and you can bet with a high judgment against them, they’ll be consulting with bankruptcy counsel. Do you think the guy carrying minimum insurance limits has a ton of cash laying around to pay your judgment? No. Like 95% of the time, that insurance money is all you’ll ever see. And you gave up $16k you could have had before ever filing to find this out the hard way. I can’t stress enough how important UIM insurance is. And if your attorney is recommending you accept limits and release the at fault from liability to try and maximize $ in your pocket, sometimes on the facts of your case, that’s the best we can do for you.