Brotherly Law

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What Are The Differences Between An Informal Settlement And A Formal Lawsuit?

47. What are the Differences between an Informal Settlement and a Formal Lawsuit1There are two ways to get the compensation you deserve and that’s through an informal settlement or a formal lawsuit. If the settlement doesn’t work, the lawsuit might. However, it is good to know the differences between the two to ensure the decisions that you make are the right decisions. Just because the lawsuit can follow a failed settlement doesn’t mean that it is always the best choice.

At Brotherly Law, we will guide you through the settlement or a civil lawsuit so that you can recover the compensation that you deserve. While the goal is to secure that compensation through an injury settlement, we will go to trial if we have to so that you can get the money you need to pay your expenses.

What is an Informal Settlement?

An informal settlement occurs when two parties wish to settle the case out of the courtroom and negotiate in order to determine the settlement. This is frequently accomplished between the insurance company and the attorneys for the plaintiff. If a settlement is reached, the parties devise a written agreement. Once the agreement is in place, no further action can be taken.

Approximately 95% of personal injury cases are settled in this way, so they never see a courtroom. The primary reason behind this statistic is the cost of taking a matter to court. There is already a cost associated with the settlement process, but moving forward toward trial means additional expenses. There will be depositions, expert witnesses may be needed, and there is more paperwork to be filed.

During the informal settlement, the attorney contacts the defendant’s insurance company and works to negotiate a settlement that both can agree upon. It is beneficial to all parties to reach a settlement because the plaintiff receives their money faster and the cost of the process is less. The names of the involved parties also stay out of the media because everything is done quietly and quickly.

What is a Formal Lawsuit?

A formal lawsuit is when a formal complaint is filed by an individual in civil court. This lawsuit can be filed against an individual, business, or government entity. Both the plaintiff and the defendant present their case to the court where a judge will hear the evidence. The judge is the arbitrator.

A person may choose a formal lawsuit when the settlement phase fails. The attorney will file a claim with the insurance company and request a settlement amount. The insurance company will counter the offer. If an agreement can’t be reached, the case can proceed to court if the attorney feels the claim is a strong one.

Then again, there are times when the formal lawsuit is chosen because the person filing the complaint wants the defendant’s actions public. In the case of a settlement, the matter is sealed and to not be discussed, which means there is no public attention to the matter.

47. What are the Differences between an Informal Settlement and a Formal Lawsuit2Nonetheless, compared to the informal settlement process, the trial can be long and drawn out. There are injury cases being tried in Pennsylvania courtrooms every day that have taken years to get to where they are. Much of this has to do with delayed trial dates as the attorneys for the parties prepare. After a judgment is made, there is the appeals process that can take a while.

With a settlement, an amount is agreed upon and then the matter is done. There are no delayed dates or appeals that will drag out the process, which is ideal for a plaintiff in need of a faster financial remedy. However, there are times when trial can’t be avoided because of lack of cooperation from the other side. When that is the case, your attorney will advise you on this so that you can make the right decision.

Philadelphia Injury Attorneys Fighting for the Compensation You Deserve

When seeking compensation, there are two ways in which to recover it – the informal settlement or a formal lawsuit. Settlements are faster, but lawsuits can result in larger sums of money. At Brotherly Law, we will review your options and the entire settlement and lawsuit process with you as they come so you can make informed decisions that can affect the outcome of your case. To learn more about what we can do for you, call us at (215) 545-8500 or contact us online to schedule a free consultation.

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