Negotiating a Settlement Agreement

Negotiating a settlement agreement in a personal injury case occurs when an offer is made by the defendant or, under the advice of your solicitor, by you.

An offer to settle a case can happen at any time. Generally, an offer is made once all the evidence has been disclosed between both parties. In some cases, a defendant may make an offer before any evidence is obtained. 

This is why it is important to seek legal advice about negotiating a settlement agreement when making a personal injury claim, as the offer might not be an accurate reflection of the compensation you deserve. In some instances, your solicitor may advise you to make an offer to the defendant. This could be alongside the disclosure of medical evidence, or to encourage the defendant’s side to negotiate.

Your solicitor will advise you on whether to negotiate a settlement agreement; however, it is your decision to make. If liability has been admitted and we have enough evidence to work out how much the claim is worth, we are likely to recommend that if you received an acceptable offer that you accept the terms and settle your case at this stage.

How to Negotiate a Settlement Agreement

When faced with a personal injury claim, one of the most frequent questions our clients ask is: ‘Can you negotiate a settlement agreement?’ The answer is yes, and negotiating a settlement agreement is often a critical step in achieving a fair resolution without having to go to court. 

However, to negotiate a settlement agreement effectively, you need to understand the process and know what factors to consider. Below are some of the key elements of negotiating settlement agreements to help you maximise your compensation.

Work Closely with Your Solicitor

Your solicitor will be your primary advocate throughout the negotiation process. Their experience and knowledge of personal injury law are invaluable in determining the value of your claim and in ensuring that the compensation offered is fair. Solicitors handle communication with the defendant or their insurance company, ensuring that legal procedures are followed and negotiations remain professional.

It is also vital that you obtain independent legal advice when you negotiate the terms of a settlement agreement. Independent legal advice ensures you fully understand your rights and obligations before committing to an agreement.

Questions you may want to ask your solicitor:

• What is the estimated value of my claim?
• What evidence do we need to strengthen our position?
• How long might it take to reach a settlement?
• What are the potential risks of accepting or rejecting an offer?

Gather All Necessary Evidence

To negotiate effectively, you’ll need to present strong evidence that supports your claim. This includes:

• Medical reports: these should document your injuries, prognosis, ongoing medical needs, and the long-term effects of your injury.
• Proof of financial losses: gather records of medical bills, receipts for out-of-pocket expenses, and proof of lost earnings or reduced earning capacity.
• Expert reports: in complex cases, expert opinions from medical professionals, occupational therapists, or financial experts can help to quantify your losses and future care needs.

This evidence forms the foundation of your negotiation. The stronger your documentation, the more likely the defendant will offer a fair settlement. Be thorough, as incomplete or missing information can lead to under-compensation.

Patience is Key

Negotiating a settlement can be a lengthy process, particularly in cases where liability is disputed or where medical treatment is ongoing. It’s important to remain patient and avoid the temptation to accept an early offer just to conclude the process quickly. Offers made early on in the process often do not reflect the full value of your claim, particularly if all the necessary evidence (such as medical reports) is not yet available.

Questions to consider:

• Should I wait until my medical condition has stabilised before accepting an offer?
• What happens if the defendant pressures me to settle quickly?
• How long should I reasonably expect the negotiations to last?

Understand the Back-and-Forth Nature of Negotiations

Settlement negotiations rarely result in an immediate agreement. Instead, they involve several rounds of offers and counteroffers as both parties attempt to agree on a fair settlement amount. During this time, your solicitor will advise you on the strength of each settlement offer, based on the evidence and legal precedents from similar cases.

Key factors influencing the negotiation process include:

• The severity of your injuries
• Liability disputes (whether the defendant accepts responsibility)
• The willingness of the defendant’s insurer to settle early
• Any future financial impacts (e.g., ongoing medical care, loss of earnings)

If the defendant disputes the value of your claim or their liability, your solicitor may suggest counteroffers, backed by additional evidence or expert testimony.

Be Aware of Your Legal Rights

During negotiations, it’s essential to remember that you are not obligated to accept an offer that you believe is unfair. Your solicitor will guide you, but the final decision on whether to settle or proceed to court is yours. It’s important to ensure that any settlement reflects the full impact of your injuries and that you are not settling for less than you deserve.

What to ask your solicitor:

• Can I reject an offer, and what happens if I do?
• What happens if negotiations fail?
• Are there legal implications to rejecting multiple offers?

Know When to Settle

At some point during settlement agreement negotiations, the defendant may make an offer that your solicitor believes is fair and reasonable based on the evidence. Knowing when to accept an offer is crucial, as settling too early could leave you under-compensated, while holding out for more could delay resolution unnecessarily or lead to you being ordered to pay unnecessarily incurred costs. 

Key considerations before accepting an offer:

• Does the offer cover both current and future medical expenses?
• Are my long-term financial losses fully accounted for?
• Have all relevant experts weighed in on my case?

Once you accept a settlement offer, the case is closed, and you typically cannot reopen it later, even if your condition worsens or you incur unexpected expenses. Therefore, it’s essential to make sure that the offer you accept is comprehensive and adequate for your needs.

How Long Does it Take to Negotiate a Settlement Agreement?

The time it takes to negotiate a settlement agreement varies depending on several factors, including the complexity of the case, the availability of evidence, and how willing to both parties are to negotiate. 

In straightforward cases, it can take just a few weeks, but more complicated claims, particularly those requiring medical evidence or expert reports, may take several months or even longer. Working with a solicitor helps streamline the process, ensuring that all necessary steps are taken while also negotiating to secure the best possible outcome.

Common Examples of Settlement Negotiations

Settlement negotiations can differ widely depending on the claim's complexity and timing. Here are a few common scenarios:

• Early offer negotiation: a defendant may offer a quick settlement before all evidence, such as medical reports, is available. Your solicitor may advise against accepting, as this offer might undervalue your claim.
• Part 36 offer: either party can make a formal offer during negotiations. If rejected, penalties can be applied if the final award doesn’t exceed the original offer.
• Negotiating compensation amount: after gathering all evidence, both sides negotiate, balancing factors like medical costs, legal costs and loss of earnings. Your solicitor can provide settlement negotiations examples from similar cases to help you understand what to expect.

In each scenario, working with a solicitor ensures that negotiations are conducted professionally, maximising the chances of securing the best possible compensation without the need for court proceedings.

What Is a Part 36 Offer?

Part 36 of the Civil Procedure Rules allows a party to make a settlement offer before trial on terms that if the offer is not accepted and the opposing party fails to beat the offer at trial, the court is likely to impose severe costs and/or interest penalties.

Either the claimant or the defendant can make a Part 36 offer as a way to convince the other party to settle the claim early without having to go to court. If used wisely, this can be a powerful negotiation tool.

A Part 36 offer can be made at any point during the claims process, and is made without any blame for the accident. A minimum period of at least 21 days must be given to consider accepting the offer. During this period, if the offer is made by the Defendants, then they,  the party making the offer is liable for all costs - this is known as the Relevant Period.

An offer cannot be altered or withdrawn during the Relevant Period unless the court gives permission.

If you believe that the offer compensates you for your injuries and losses, you can accept the offer. Compensation is usually paid out quickly with Part 36 offers; however, you will not be able to claim any more money for your injuries at a later date, which could result in serious financial loss in the future (for example, loss of earnings or medical costs).

A defendant’s insurer may make a Part 36 offer to save money, as the amount of compensation offered will be much less than what you are entitled to. That’s why it is important to seek legal advice from an experienced solicitor when negotiating a personal injury claim.

The Role of Medical Evidence in Settlement Negotiations

Medical evidence is a cornerstone of any personal injury settlement negotiations. Accurate and thorough medical documentation is critical in determining the severity of your injuries, the extent of future medical needs, and the overall value of your claim. 

Settlement agreement negotiations rely heavily on medical reports and expert testimony to ensure that any compensation offered is fair and reasonable.

This evidence can include medical reports, expert opinions, rehabilitation assessments, and other documentation that outlines both immediate and long-term impacts on your health and wellbeing.

Solicitors often advise waiting until your medical treatment or recovery is complete - or until a clear prognosis is established - before accepting an offer. This ensures that any compensation you receive will cover not only current medical expenses, but also any ongoing treatment, rehabilitation, or potential future medical needs. 

Without comprehensive medical evidence, you risk underestimating the long-term impact of your injury and accepting a settlement that fails to reflect its full value.

Having a solid understanding of your medical condition enables your solicitor to negotiate more effectively, ensuring that any compensation offer accurately reflects both your pain and suffering and any future financial costs tied to your injuries.

Common Mistakes to Avoid When Negotiating a Settlement Agreement

There are several common pitfalls that can undermine the outcome of your personal injury settlement negotiation:

Accepting the First Offer Too Quickly

Early offers, especially from the defendant's insurance company, are often lower than what you may be entitled to. Accepting too soon may leave you under-compensated for future expenses related to your injury.

Not Having Full Medical Evidence

Failing to wait for a complete medical prognosis before settling can result in inadequate compensation. It’s important to ensure that all your injuries have been properly diagnosed, and that potential future medical issues are accounted for before agreeing to any offer.

Ignoring Future Losses

Your settlement should account for both immediate and long-term financial impacts, including lost wages, reduced earning capacity, and future medical treatment. Failing to factor in these potential losses can lead to financial hardship down the road.

Not Seeking Independent Legal Advice

A solicitor experienced in personal injury claims can provide invaluable advice. They understand the complexities of personal injury law and can ensure you don’t settle for less than you deserve.

Failing to seek independent legal advice before accepting a settlement agreement is a common mistake that can undermine the outcome of your claim. Avoiding these common mistakes is essential to maximising your financial compensation and ensuring that your settlement truly reflects the impact of your injuries on your life.

Accepting an Offer

If the defendant has made a fair offer that your solicitor thinks is acceptable, they will advise you to accept it.

Remember that accepting an offer will mean full settlement of your claim. There will be no opportunity to reopen the claim, so it is vital that you do not settle until you agree with one of the following:

• Any medical symptoms you have are resolved
• You are at a stage in the recovery period where there is a clear prognosis for the future. 

Once you agree to accept an offer, your solicitor will advise the defendant’s side, including when they will be sending a cheque in settlement of your claim. Your lawyer will make you aware of when you can expect to receive your settlement cheque.

Rejecting an Offer

If the defendant has made an offer and your lawyer doesn’t believe it is appropriate, they will advise you to reject it. Broadly speaking, there are two reasons why this will be the case:

• The defendant may have made an offer in advance of all the relevant evidence being gathered, which would mean that your claim cannot be appropriately valued.
• The defendant’s offer is below what we would anticipate you should receive for your claim.

In either of these instances, your lawyer will advise you on the next steps.

How Long Does it Take to Get a Second Settlement Offer?

The time it takes to receive a second settlement offer varies depending on the complexity of the case and the stage of the negotiations. After rejecting the initial offer, it may take several weeks or even months for the defendant to review and counter with a second settlement offer, particularly if additional evidence is needed.

What Happens if Settlement Negotiations Fail?

If settlement negotiations fail, the next step is often to initiate court proceedings. While going to court can be time-consuming and costly, it may be necessary if a fair settlement cannot be reached through negotiation.

Once court proceedings are issued, both sides will present their evidence, and a judge will make a decision regarding liability and the appropriate level of financial compensation. 

It’s important to note that very few personal injury cases actually go to trial, as most parties prefer to settle before incurring the additional legal costs and uncertainties associated with a court case.

That said, the decision to go to court should not be taken lightly. Court proceedings can extend the length of the case, and there is always a risk that the court’s decision may not be in your favour. Your solicitor will advise you on whether court action is the best course of action based on the strength of your case and the negotiations to date.

Not Satisfied With Your Solicitor?

If you are not satisfied by how the law firm you have appointed is handling your case, we offer a “Check My Claim” service so you can get a second opinion on the service you are receiving from your current solicitor.

We can check your claim if:

• Your case has been mishandled or progress has taken too long
• You have been told your claim is not worthwhile pursuing
• You are not happy with the amount of compensation you have been told you will receive
• Your solicitor has settled your case for  a lower amount of compensation that you feel you deserve

For more information on how you can switch solicitors, take a look at our dedicated page.