Receive free tips, forms, and questions for maximizing damages in small personal injury cases

While the costs of processing small cases continue to rise, insurers and jurors are constantly reducing settlements and awards. This puts intense pressure directly on the shoulders of personal injury attorneys.

These chapters help to relieve some of that pressure. They deliver guidelines, techniques, checklists, and forms to help you screen, document, negotiate, and settle or litigate your smaller cases. They will teach you dozens of proven techniques for obtaining top dollar in small cases.

To have your free maximizing-damages chapter e-mailed to you, fill in the
blanks below and press Submit. The chapters available are listed below.

You may select one of the following chapters and have it e-mailed to you at no charge:

Chapter 1: The Small Personal Injury Practice

Chapter 2: Initial Client Contact

Chapter 3: Investigation and Preparation of the Case

Chapter 4: Settlement Negotiations

Chapter 5: When Settlement Fails—Commencing the Lawsuit

Chapter 6: The Trial

Chapter 7: After the Verdict

Chapter 8: Public Relations in Small Personal Injury Cases

Here are the first 12 pages of a 173-page chapter:

Chapter 4

Settlement
Negotiations

§400 In General

§410 Fifteen Key Points to Remember Before Negotiating a Small Personal Injury Claim

§420 The Demand Letter: Checklist of Damages

§430 Evaluating and Establishing a Demand Figure in Small Personal Injury Cases

§440 Settlement Negotiations

§450 lnsurance Carrier Negotiation Tactics and How to Deal With Them

§460 Consideration of the Offer and Appropriate Response

§470 Alternate Dispute Resolution

§480 Releases: Problems and Pitfalls

§490 Recognizing and Reacting to Unreasonable Insurance Carriers

§421 Medical Bills

§421.1 Past Medical Bills

§421.2 Future Medical Bills

§421.3 Sample Paragraph for Demand Letter Regarding Future Bills

§422 Loss of Income or Wage Loss

§422.1 Past Income

§422.2 Future Loss of Income

§423 Pain

§423.1 Future Pain

§424 Suffering

§424.1 Proving Damages in Elderly Plaintiff Cases

§424.1.1 Checklist: Responses to Insurance Carrier Reasons for Low Offers in Elderly Plaintiff Cases

§424.2 Preparing an Elderly Plaintiff Case for Trial

§424.2.1 Checklist: Expediting Resolution of Elderly Cases

§425 Loss of Consortium

§425.1 Documenting Loss of Consortium

§425.2 Loss of Consortium Problems and Opportunities

§425.3 Reference Aids for Loss of Consortium Cases

§426 Permanent Impairment

§427 Permanency

§428 Evaluating, Proving, and Settling Cases Involving Scarring and Permanent
Disfigurement

§429 Property Damage and Miscellaneous Expenses

§430 Evaluating and Establishing a Demand Figure in Small Personal Injury Cases

§431 Special Method for Establishing a Demand in Small Cases

§432 Establishing an Authority Figure With Your Client

§432.1 How to Deal With a Client Who Will Not Accept a Reasonable Offer

§432.2 Responses to Client Questions About Settlement

§433 Sample: Demand Letter in a Small Personal Injury Case

§434 Checklist for Settlement Brochures

§435 Settlement Brochures—When to Use/When Not to Use

§436 Informing Clients About Potential Bad Verdict Results

§436.1 Sixteen Cases That Could Have Settled Which Resulted in Low or
Defense Verdicts

§440 Settlement Negotiations

§441 When to Negotiate and When Not to Negotiate

§442 Where to Negotiate

§443 Concessions You Can Make

§444 Concessions to Obtain

§445 Fourteen Negotiating Techniques That Really Work

§446 Filing Suit During Negotiations

§450 Insurance Carrier Negotiation Tactics and How to Deal With Them

§451 The Ridiculously Low Offer

§452 Getting Authority

§453 Refusal to Respond

§453.1 The Carrot Tactic

§454 What Will You Take?

§454.1 “Preliminary Evaluation” Technique

§455 The Use of Local or National Adjustment Companies

§456 The One and Only Offer Technique

§457 The Bounce Back Double Lowball

§458 Request for Documentation, Statements, and Independent Medical Evaluations

§458.1 More Documentation

§458.1.1 Request for Medical Records for the Five-Year to Ten-Year Period
Prior to Claim

§458.1.2 Sample Letter to Insurance Carrier Regarding Five and Ten-Year Medical Record Request

§458.2 Using Client Statements Obtained Before Representation

§458.3 How to Deal With Client Statements Obtained by Insurance Carrier

§458.4 Independent Medical Examinations

§458.4.1 How to Minimize the Impact of Independent Medical Examinations

§459 Reduction or Withdrawal of the Offer

§460 Consideration of the Offer and Appropriate Response

§461 Communicating the Offer to the Client

§462 Responding to the Offer

§463 Written Response to Insurance Adjuster

§463.1 Sample: Response in an Automobile Case With Some Liability Question

§463.2 Sample: Written Response in an Automobile Case With Clear Liability

§463.3 Sample: Written Response in Automobile Case With Questionable Damages

§463.4 Sample: Response in a Premises Liability Case

§464 Structured Settlements

§464.1 Advantages and Disadvantages of Structured Settlements

§465 How Much, or How Little, to Settle for?

§466 The 18 Steps to Evaluation of a Small Personal Injury Case

§466.1 Liability

§466.2 Comparative Negligence

§466.3 Medical Bills

§466.4 Medical Information

§466.5 Injuries

§466.6 Loss of Income

§466.7 Permanency, Permanent Impairment and Permanent Disfigurement

§466.8 Collision Damage

§466.9 Quality of Plaintiff

§466.10 Quality of Defendant

§466.11 Loss of Consortium

§466.12 The Insurance Company

§466.13 Client’s Expectations

§466.14 Quality of Potential Witnesses

§466.15 Venue

§466.16 Liens

§466.17 Law

§466.18 Time From Date of Incident to Trial

§466.19 The Final Settlement Figure

§467 An Analysis of Ten Recent Small Personal Injury Settlements (6/92 Supplement)

§467.1 Restaurant Slip-and-Fall

§467.2 Postal Worker in Rear-End Collision

§467.3 Auto Passenger With Hemophilia

§467.4 Student Actress Falling From Stage

§467.5 High School Track Star

§467.6 Pregnant Woman in Rear-End Collision

§467.7 Fall From Porch Because of Defective Railing

§467.8 Motorcycle/Automobile Collision

§467.9 Dog Bite Case

§467.10 Auto Passenger With Soft Tissue Injuries

§468 Policy Limits

§468.1 Checklist When Settling for Policy Limits

§468.2 Agreement to Accept Policy Limits if the Defendant or Potential Defendant Files for Bankruptcy

§468.3 Sample Forms for Relief From Automatic Stay if the Defendant Files for Bankruptcy

§469 Recent Jury Verdicts in Small to Medium Personal Injury Cases (7/94 Supplement)

§469.1 Medical Malpractice Verdict Resulting in Facial Nerve Damage

§469.2 Rear-End Collision Against Insurance Company

§469.3 Rear-End Collision With Herniated Disc

§469.4 Slip-and-Fall in Front of Hospital

§469.5 Pedestrian Struck by Automobile

§469.6 Head-On Collision

§469.7 Slip-and-Fall on Ice at Residence

§469.8 Rear-End Collision Followed by a Second Accident

§469.9 Repairman Falls Through Defective Steps

§469.10 Young Boy Injured on School Playground

§469.11 Slip-and-Fall of Female Prisoner

§469.12 Couple Injured by Farm Chemicals

§469.13 Emotional Distress for Mother Who Witnessed Daughter’s Injuries

§469.14 Pedestrian Struck by Automobile During Snow Storm

§469.15 Cosmetic Company Causes Facial Burns

§469.16 Reference Aids

§470 Alternate Dispute Resolution

§471 Forms of Alternate Dispute Resolution

§471.1 Mediation

§471.2 Arbitration

§471.3 High-Low Arbitration

§471.4 Minitrials

§472 Specific Alternate Dispute Resolution Firms

§473 When to Use Alternate Dispute Resolution

§474 Preparation for Successful Mediation

§474.1 Sixteen Mediation Preparation Tips Guaranteed to Lead to Settlement

§474.2 Sample: Best Case Summary for Mediation

§475 Sample Opening Statement in a Mediation Session

§475.1 Using Sample Closing Arguments to Maximize Settlement Value in Mediation

§476 Mediation Problems and How to Avoid Them

§476.1 Authorization and Power of Attorney Form for Mediation

§476.2 Release Problems at Mediation

§477 Special Mediation Technique: Request for Neutral Evaluation in Addition to Mediation

§477.1 Form Requesting Early Neutral Evaluation in Addition to Mediation

§477.2 Checklist for Requesting Early Neutral Evaluation in Addition to Mediation

§478 What to Look for in a Good Mediator

§478.1 Qualities of a Good Mediator

§480 Releases: Problems and Pitfalls

§481 “You Send the Release; We’ll Send the Check”

§482 The Elements of a Release

§482.1 Parties’ Intent

§482.2 Scope of the Release

§482.3 Enforceability of the Release

§482.4 Dealing With Defendants or Insurance Carriers Who Fail to Comply With Settlement Agreement

§482.4.1 Motion for Relief and Reinstatement Sanctions—Attorney Fees

§482.5 Problems Collecting Checks

§482.5.1 Eight Tips on How to Get the Check on Time

§483 Special Needs Trust

§490 Recognizing and Reacting to Unreasonable Insurance Carriers

§490.1 Why Insurance Carriers Are Becoming More Unreasonable

§490.2 How to Deal With Unreasonable Insurance Adjusters and Carriers

§490.3 Insurance Company Bad Faith Actions

§490.3.1 Actions Against a Disability Carrier

§490.3.2 Actions Against an HMO or Health Carrier

§490.3.3 Medical Payments Coverage

§490.3.4 Bad Faith Actions for Failing to Settle Within Policy Limits

§490.3.5 Sample Letter to Insurance Carrier Regarding First-Party Bad Faith

§490.3.6 Letter to Carrier Accepting Policy Limits in Contemplation of Bad Faith Claim for Failure to Settle a Claim Within Policy Limits

§490.4 Inside the Minds, Offices and Claims Manuals of Insurance Claims Adjusters

§490.4.1 Adjusters Who Work for Very Large Carriers With Conservative Reputations

§490.4.2 Adjusters Who Work for Reasonable Medium-Sized, National or Regional Insurance Carriers

§490.4.3 Thirteen Tips to Remember When Considering the Mind-Set of Various Adjusters

§490.4.4 The Office of a Claims Adjuster

§490.4.5 Inside the Claims Manual of an Insurance Carrier

§490.4.6 Dealing With the Effects of September 11, 2001

§490.4.7 Handling Small to Medium Personal Injury Cases in a Difficult Economy

§491 Using Defense Attorneys, Claims Adjusters, Mediators and Focus Groups to Evaluate
Your Case

§491.1 Form for Use With Focus Groups

§492 Handling Slam Dunk Policy Limits Cases

§492.1 Eleven Tips on Handling a So-Called Slam Dunk Policy Limits Case

§400 In General

There have been hundreds of books and self-improvement tapes written about the art of negotiation. It is impossible to set forth a simple and concise theory of negotiation when it comes to personal injury cases. Every attorney who practices law negotiates differently from any other attorney. Some lawyers are masters at the art of negotiation while others will never master the art successfully even if they were to read every book and listen to every self-improvement tape on the subject. In this chapter, I will not teach you how to negotiate generally. I will attempt to teach you that negotiating small personal injury cases can be different from negotiating large personal injury cases and very different from negotiating property settlements in divorce, plea bargaining sentences for various criminal offenders, or the salaries of professional athletes.

§410 Fifteen Key Points to Remember Before Negotiating a Small Personal
Injury Claim

1. Insurance companies are not afraid of being sued in small personal injury claims.
The cost of defending a small personal injury claim usually will not be very high when considered against the outside chance of a substantial verdict against the carrier. An insurance company would rather not pay $6,000 to defend a claim worth $10,000, but they will do so if they have to or if they want to. An insurance company would rather make you litigate a case to completion or to the courthouse steps than to leave the impression with you or with any other plaintiffs attorney that they will settle a claim just to avoid litigation. If liability is a big issue, believe me, they will spend $10,000 to defend a case that could have settled for $3,000. So remember, threatening to sue in a small case is not going to make either the insurance adjuster or his supervisor shake in their respective boots.

2. Insurance adjusters prefer to close files, but they will not do so at the expense of settling a small claim for much more than it’s worth.
Insurance adjusters are no different than other bureaucrats, including plaintiffs lawyers. They prefer to close cases, put the files away, and move on to other things. Closing files is a goal of all adjusters just as judges have the goal of moving crowded dockets along. However, an insurance adjuster or his supervisor will not substantially compromise the value of a small claim just for the convenience of closing the file. If suit is commenced the file is simply referred to the defense attorney and the internal process takes a different turn. The adjuster begins a communication process with the defense attorney and leaves the hard work to the defense firm.

3. Every insurance adjuster or claims supervisor must justify the settlement they are paying to at least one superior at some point in time.
Even a senior adjuster or claims manager will have to justify the payment of a settlement to somebody either before or following the settlement. This means that they can always talk about “getting authority” and will not pay a claim without realizing that the settlement could be questioned or tested at a later date. Every settlement must contain appropriate justification and documentation. An insurance company employee will not run the risk of job security just to close a file or avoid litigation. Therefore, the days of settling a case with one letter and two telephone calls are over. Even the small personal injury claim requires substantial documentation and support; it is the plaintiffs attorney’s job to provide that.

4. Insurance defense attorneys make more money by litigating cases as long as possible than they do by settling cases early after suit.
If it has not already become clear to you, insurance defense firms earn the bulk of their money by litigating. They send the insurance company bills for services based upon hourly participation in the case. They do not work on commissions, and they are not paid huge fees to settle cases early in the game. If you commence litigation in a small case, be prepared to do some work. Even if the defense attorney knows that you may be willing to settle your case for much less than your demand, he won’t be on his knees begging you to do so. Therefore, once you file suit, be committed to take it to trial if necessary because the defense attorney will not be going out of his way to settle immediately.

5. There are certain insurance companies, local and national, who will seldom settle small to medium range personal injury cases for a fair amount without the necessity of suit and perhaps a full trial.
If you are brand new to the practice of personal injury you have two ways of finding out which companies don’t settle cases easily:

a. Spend a few years learning through experience; or

b. Ask somebody.

I recommend the latter approach because it will save you countless hours of aggravation, frustration, and effort.

The names of those companies will be known to experienced plaintiffs attorneys in your jurisdiction. There are certain national and statewide companies who are known throughout the industry as being extremely conservative when it comes to settling personal injury claims. Those carriers have a philosophy, mind-set, and even formal procedure regarding the settlement of claims. They will seldom put forth a reasonable offer to settle the small personal injury claim, especially those involving soft tissue injuries. Such companies know that most individuals unrepresented by counsel will succumb to the “take it or leave it approach.” Those individual claimants believe, want to believe, or are forced to believe that they must accept an insurance adjuster’s offer. The carriers also know that the majority of plaintiffs attorneys will settle claims rather than commence suit or go to trial. Only a small minority of plaintiffs attorneys are willing to take the time, effort, and expense to go all the way to trial. The conservative carriers know this.

Example: The Three Cousins

This firm had the experience of representing three girls from the same family, all cousins, over the course of several years. Each of them had automobile accident claims involving clear liability with well-documented soft tissue injuries. Two of the girls, approximately the same age, were involved in automobile accidents in which a conservative insurance carrier of national stature was involved. Their claims were worth approximately $20,000 each at the time of the first letter of demand. On each occasion the final offer by the insurance carrier prior to suit was less than $10,000. In each case suit was commenced, discovery took place over a two-year period and the carrier settled both of these cases on the courthouse steps for amounts approaching $25,000.

The third cousin was also involved in an automobile accident, but the insurance carrier was a more reasonable company with whom our firm had fair success over the years. Our client’s claim was worth approximately $30,000 maximum and the final settlement after the original letter of demand and a few courteous follow-up letters was $33,000.

The moral of this story: some insurance companies settle—some don’t.

6. You are wasting your time preparing for negotiation or trying to settle with the insurance companies referred to in paragraph 5 above.
When you learn the identity of the insurance companies who do not settle without litigation, you must decide whether or not to accept cases involving those carriers and if you do, commit yourself to litigation. There are no two ways about it.
If your case is a soft tissue case with subjective complaints, or the injury involves substantial chiropractic treatment, you can count on certain insurance carriers to pay very little for pain and suffering. The adjuster will question everything in the file and if there is even the slightest liability question, the offer will approach the special damages and sometimes even less. If you waste your time trying to convince the carrier with letters, phone calls, documentation, and settlement brochures, you are merely delaying the inevitable. If your case is a soft tissue injury and you anticipate a medium range settlement value ($25,000 range or better), simply commence your lawsuit after the initial investigation and preparation. Do not waste your time trying to convince these conservative carriers about the merits of your claim. Litigation and verdicts are the only language they really respect.

7. Plaintiff’s attorneys make a living by settling cases, but they can settle cases only if they also know how to litigate.
As stated throughout this book, you can settle cases for maximum damages only if you also know how to litigate. If you plan to practice personal injury law and you intend to accept small to medium range cases, prepare yourself for litigation. Otherwise, I suggest you either move to another area of law or refer to yourself as a settling attorney.

8. Insurance carriers are far more impressed with special damages such as medical bills and well documented loss of income, than they are with lengthy dissertations about pain, suffering, inconvenience, and mental anguish.
Do not try to build your case with explanations of pain, suffering, and subjective complaints without substantial documentation of tangible damages. Insurance companies are just not moved by such intangibles as pain, suffering, inconvenience, loss of consortium, and mental anguish. Facts, figures, objective signs of injury, and substantial documentation are the necessary elements to convince insurance carriers to settle cases.

Example: Tweedle Dee and Tweedle Dum

Imagine two passengers in the back seat of a rear-end collision case with absolute liability and substantial collision damages. The names of the passengers are Tweedle Dee and Tweedle Dum. They are the same age, same weight, and work for the same company. Each received the same impact and essentially the exact same injuries. Tweedle Dee goes to a medical doctor who prescribes six weeks of physical therapy. He takes approximately eight weeks to recover from his acute injuries and misses work for a period of six weeks. His medical bills and physical therapy charges are approximately $2,500 and his lost wages are approximately $1,800. His residual injuries are minimal and he has virtually recovered after six months.

Tweedle Dum goes to the local hospital emergency ward which recommends that he see a specialist. Instead, he visits a chiropractor for four or five visits and because of his unwillingness to miss work, he loses only five days of wages. However, he is in considerable pain, is unable to interact with his family, has difficulty performing his activities at work, and misses all his leisure activities for almost an entire year. His medical bills total approximately $500 and his lost wages approximate $300. Many of his friends, family, and work associates write letters concerning the incredible pain and difficulty he has had for the one-year period since the accident.

The insurance company will settle Tweedle Dee’s case for an amount approximating $12,000 or even better, and they will offer Tweedle Dum no more than $3,000 to $5,000 maximum, if he is lucky. MORAL OF THE STORY: Insurance companies believe facts and figures more than they believe letters from friends about pain and suffering.

9. Most capable defense attorneys can fwd weaknesses in your case that have either been overlooked by the adjuster or could not be discovered by the adjuster without engaging in formal discovery procedures.
When you attempt to settle your case directly with an insurance adjuster you control most of
the information that he receives. Once litigation is commenced, the defense attorney will use every possible opportunity to scrutinize your case in its entirety to find weaknesses. By using formal dis-
covery methods such as medical authorization forms, independent medical examinations, depositions, interrogatories, and requests for production of documents, some, if not many, weaknesses of your case will be disclosed. Therefore, your case can often get weaker rather than stronger after you file suit. If you are aware of potential weaknesses such as a number of prior injuries, previous permanent impairment claims, convictions which are admissible, or other problems, do your best to settle the case prior to litigation.

10. A verdict that is close to or equal to the amount offered before trial is not really a win, but it may help your practice.
A verdict that is close to the final offer before trial may not be considered an absolute win. It will, however, show the carrier and defense firms that you are willing and able to go to trial, and secondly, you will gain the experience of the trial process. In some cases it is better to roll the dice and go to trial just to keep yourself honest and able.

11. Defense attorneys will usually have more settlement authority or knowledge of settlement authority than they will admit to.
During negotiations after litigation has been commenced the defense attorney will almost always refer to the necessity of obtaining permission or authority from the carrier. In point of fact, most defense attorneys know the potential authority in almost every case. One way of estimating what the authority figure may be is by asking the following question: “Mr. Defense Attorney, what would you do if you were in my place? What do you think this case is worth?” If the defense attorney gives you a figure, add another fifty to one hundred percent depending upon the size of the case, the nature of liability, and the extent of documented damages. As the case approaches trial the figure from the defense attorney may approach accuracy, but believe me, the defense attorney will always try to save the carrier some money.

12. Defense attorneys obtain and maintain insurance company clients by settling cases for less than authority and by winning defense verdicts.
Insurance defense firms do not attract business by being best friends with the plaintiffs attorneys. Therefore, do not expect them to bend over backwards to settle your case. They will only pay top authority if they believe they may get clocked with a substantial verdict at trial. If the defense attorney believes he can win on liability or damages, the roll of the dice will be much more attractive. Thus, while some defense attorneys will tell you how hard they are trying to get you a settlement, do not count the money until it is in your pocket.

13. An offer made that you cannot refuse is almost never the best that you can do in any given small personal injury case.
An offer that can’t be refused can be used by either party in settlement negotiations. If you allow the insurance adjuster to “make an offer you can’t refuse,” you can count on that offer being sufficiently lower than the reserves in the case. If you have a case with strong liability, well-documented damages, and a great plaintiff (refer to the PI-5 criteria described in §131) ask that the insurance adjuster make an offer that no one would refuse. In cases in which some of the PI-5 criteria are weak, you should probably consider taking an offer you can’t refuse.

14. Clients that settle their cases without the necessity of litigation may always have second thoughts, but on the whole they will be far happier than the client who has to go all the way to trial to win a verdict in a small case.
The philosophy that “a case settled is a case won” is very appropriate in small personal injury claims. Just as divorce clients often complain about their settlements, there are some personal injury clients who will always have doubts about the adequacy of their settlements. Remind those clients that the difficulty and emotional stress associated with litigation are seldom worth the few thousand dollar difference that may come with a plaintiffs verdict. It is my opinion that a $15,000 settlement is far better than a $17,000 verdict with interest after two years of discovery, depositions, harassment, and the ultimate emotional drain of a jury trial.

15. Insurance companies as entities are not fair, logical, predictable, or understandable, but the insurance adjusters who work for these companies are almost always ordinary, likeable human beings.
I have been in the practice of personal injury claims for almost 18 years and it has become clear to me that it is impossible to “figure out” insurance companies just as it is impossible to “figure out” the opposite sex. It is impossible to explain the logic of insurance companies, or the lack thereof, to clients. It is extremely important, however, to remember that insurance adjusters and their supervisors are human just like you. Treat them with the same respect that you require.

16. Be aware of several predominant weaknesses or shortfalls in personal injury cases which reduce the settlement value and which must be considered during settlement negotiations.
There are certain weaknesses in many personal injury cases which are addressed by insurance adjusters during settlement negotiations, in an attempt to reduce the value of your potential settlement. Insurance adjusters are trained to look for these weaknesses in all cases, but they are most often used in the small to medium cases. If your case has any of these weak elements, it is often difficult to weigh their negative value in your settlement demand. You should be aware that these factors frequently send small to medium cases to suit and eventually to trial. They are discussed extensively in §512, with suggestions as to how to alleviate, or at least minimize, the deficiencies before you take the case to suit or trial.
If the weaknesses are significant, such as a pre-existing injury, you will need to reconsider the settlement value of your case or be prepared to roll the dice at trial. When adjusters receive settlement authority from the claims supervisor, and their authority is based upon the weaknesses—as opposed to the strengths—of your case, you will often be surprised at the small amount of the offer. If several of the listed weaknesses exist in your case, you must confront your client and make certain that he or she understands the difficulties inherent with the settlement, and the eventual trial of the case. If the client refuses to accept the “facts of life” that the case has been weakened by factors out of your control, I recommend that at the outset of your representation, you obtain as much of your costs and expenses of suit as possible.

§420 The Demand Letter: Checklist of Damages

If you have prepared your case thoroughly through the methods outlined in Chapter 3, you will now be ready to initiate settlement negotiations with a demand letter. The demand letter is usually the first official document to set forth the plaintiff’s strongest case in summary form.

Consider the importance of the psychology of the demand letter. The credibility of that letter and the demand figure contained therein are crucial factors in establishing an open communication path to settlement. If you cram your letter full of unsupported facts, theories, and legal conclusions, your credibility will be diminished at the outset. Furthermore, if your facts and figures are accurate but you close the letter with an outrageous demand, you are unlikely to receive a response from the insurance company representative. It is difficult to balance persuasion, credibility, and facts, but the ability to do so will maximize damages in any small personal injury case.

Your demand letter must be polite, concise, factual, and consistent with the information that has been furnished to the insurance adjuster during the course of the claim period. Before writing the letter use the following criteria to arrive at a meaningful demand figure. Remember your goal: To maximize the damages and, therefore, the ultimate settlement figure. “Maximize” does not mean “exaggerate” or “expand.” “Maximize” means to “emphasize with credibility.”

The following checklist contains the most important areas of a personal injury claim.

§421 Medical Bills

In my opinion, your client’s medical bills are the single most important documentation of injuries. Insurance companies place great weight on the amount, timing, and quality of medical bills. It is a fact of life that insurance companies will never be impressed with $4,000 in chiropractic treatment if supported by only one $65 hospital emergency bill. They will be impressed with a several thousand dollar hospital bill or a several thousand dollar physical therapy bill if the physical therapy has been prescribed by a reputable orthopedist or medical doctor.

Since most insurance adjusters evaluate cases with reference to the amount of special damages, it is imperative to provide them with all documented medical bills. The failure to include a $200 medical bill could result in a settlement that is a few thousand dollars short of the true value of the claim.

§421.1 Past Medical Bills

When checking the past medical bills remember the following;

1. Do not send duplicate bills for the same charge. This is usually done by sending bills that have not been properly reviewed and indexed. Insurance adjusters either mistrust you or believe you are not paying adequate attention to your file.

2. Do not send bills that are unrelated to the injury. For example, some clients will see their treating physician for matters unrelated to the injury such as the flu. Even an innocent mistake may be viewed by the carrier as an attempt to deceive on the part of the client and/or the plaintiff’s attorney.

3. Make sure your bills are supported by other documentation such as medical reports, physical therapy reports, or laboratory results.

4. Verify the accuracy of the medical bills with the provider before sending them out to the carrier.

5. Send a summary of the medical bills and the dates on which you sent the adjuster copies during the course of the claim (see §361.4).

§421.2 Future Medical Bills

Future medical bills are often difficult to predict, but not impossible. If you anticipate future medical treatment, request the treating physician or facility to give an explanation as to: (1) future prescriptions; (2) future physical therapy; (3) possible future surgery; (4) possible future hospital bills; and (5) possible future doctors’ visits for follow-up care.

§421.3 Sample Paragraph for Demand Letter Regarding Future Bills

“We anticipate that medical bills in the future will approximate $2,500, present value, as stated in the enclosed letters from Dr. Smith dated March 5, 20___ and Mr. Brown, Executive Director of State Medical Center dated February 2, 20___. The possible surgery on my client’s knee will require some follow-up care, and while we concede that Dr. Smith does not think that such surgery is highly probable, we do want to take this into consideration in the evaluation of our client’s claim. Our client would like to be assured that payment for any necessary future medical treatment will be covered by the settlement amount.”

§422 Loss of Income or Wage Loss

Your client’s loss of income is the second most important item for consideration by the insurance adjuster. Strict attention to detail is required in this area. A general request for lost income, unsupported by proper documentation, will simply be rejected by the adjuster. As discussed in Chapter 3, it is often difficult to obtain accurate lost income data. If your client lost minimal income or has been paid under the table for the past several years prior to the injury, it is best to accept your loss and do what you can with more reliable areas of damages.

§422.1 Past Income

The figure set forth in your demand letter for past lost income must be supported by the lost wage information or lost wage letter that has been supplied during the course of the claim. Past lost income can be any of the following:

1. Actual wages not paid as a result of the injury. For example, six weeks salary at $400 per week for a total of $2,400.

2. Loss of vacation time used for the injury. Be certain this request is accurate and that your client did not use vacation time for a trip to Florida.

3. Use of verified sick leave for the recuperation from the injury. Be careful not to include days missed for the flu, colds, or other sickness if they are unrelated to the injury and would have been lost anyway.

4. Loss of overtime because of inability to work. Many employers can provide a statement similar to the following: “John Jones would have been able to work a minimum of ten hours per week of overtime for the six weeks he was out of work because of his injury. His total projected loss of overtime was sixty hours at an overtime rate of pay of $10.80 per hour, representing time and a half.”

5. Loss of commissions that could have been earned had it not been for the injury. A statement similar to the following would support a claim for lost commissions: “We have reviewed the record of Mr. Jones from last year which indicates that he sold $6,000 worth of merchandise during the same time period as his recuperation period. This year our sales for that period were 10% better than last year. We are confident that Mr. Jones would have received at least $600 in commissions over and above his normal salary during the injury recovery period if he had been able to work at that time.”

6. Loss of income from self-employment. Self-employment income is often difficult to prove without providing formal tax returns. If your client uses the services of an accountant, request that the accountant document loss of self-income. Another method is to obtain letters from clients or customers of the injured person with statements similar to the following:

John Jones performed carpentry services for me on my camp during the months of July and August, 20___. After his injury he was unable to complete the job and I would have paid him approximately $5,000 more to complete the job. Enclosed are copies of my two checks to Mr. Jones for the carpentry services he performed prior to his injury.

7. Fringe benefits. If your client has lost any fringe benefits because of the injury such as paid health insurance or retirement income credit be sure to include the value of the loss in your claim.

§422.2 Future Loss of Income

Future loss of income is more difficult to substantiate. If your client’s doctor anticipates future surgery or future treatment that will result in time lost from work, request the doctor to prepare a letter to that effect. The letter must contain an estimate as to the period of time for recovery and a supporting letter from the employer as to the value of that time.

In some cases it may be appropriate to retain the services of an economist. This is usually unnecessary in small cases but if there is some permanent impairment that may result in future loss of income, obtain a report from an economist to establish future loss of income. The use of a well-respected economist can often turn a $30,000 case into a $50,000 case. The economist may charge up to $1,000 or more for his report, but if the report is credible and supported by other documentation in the file, it will be worth several times its cost.

§423 Pain

Pain is the most difficult concept to quantify in terms of damages. As stated above in §410, insurance companies are generally unimpressed by pain in small cases. There are ways to demonstrate the evidence and duration of real pain by using any of the following.

1. Pictures.

Photographs of bruises, cuts, black eyes, and orthopedic devices will visibly demonstrate the evidence of pain. If your client retains you early in the case and has any element of injuries that can be photographed, be sure to obtain color pictures and send them to the adjuster either before or with the demand letter.

2. Excerpts from doctors’ reports.

Most doctors will make reference to pain that can be quite descriptive. For example, the doctor may state “26-year-old male in obvious discomfort presents with history of auto accident. The patient exhibits substantial discomfort in removing his shirt....”

3. Excerpts from hospital records.

Nurses’ notes and emergency reports will often describe objective evidence and symptoms of pain. Review such reports carefully and include appropriate excerpts in your demand letter or highlight those excerpts with a yellow marker in the medical reports enclosed with your demand letter.

4. Reference to medical procedures.

Your client may have not only experienced pain from the incident itself but may have also experienced pain as a result of certain surgical procedures, physical therapy, or other medical treatment. An arthroscopic procedure, for example, requires an intrusion into the flesh and joints, general anesthesia, and the necessity of engaging in physical therapy. Certain diagnostic procedures such as myelograms are also painful experiences. Doctors’ records will usually not discuss the amount of pain involved in a surgical or diagnostic procedure and, therefore, it may be necessary to ask for an additional narrative report regarding the existence of pain. The important point to remember is that medical procedures themselves are indeed an element of pain.

5. Side effects from medication.

Certain medications produce side effects that can cause pain, discomfort, disorientation, dizziness, or an upset stomach. I strongly recommend a book such as The New Prescription Drug Reference Guide by the editors of Consumer Guide, published by Publications International, 1985. This book lists most of the prescription medications along with their generic names and side effects. If your client has been given cortisone shots or has been prescribed certain medications, the chance of side effects are very likely. If necessary, make reference to the prescription drug reference guide or request your client’s doctor to outline the side effects. Be sure to ask your client whether or not side effects were actually experienced as a result of medications. Ask your client to save all prescription containers to be used at trial, if necessary.

6. Physical therapy notes.

Physical therapists’ notes always include both subjective and objective signs of pain. If the therapy notes run for a period of several weeks or months, such documentation is excellent to support the claim for a period of pain.

7. Statements by lay witnesses.

Insurance adjusters will not be too impressed by quotations from lay witnesses, but they can be useful in documenting potential testimony. If the neighbor writes a statement that “John looked like he was hit by a Mack Truck” and the statement is not exaggerated, include it with your demand letter.

§423.1 Future Pain

Doctors will often refer to the possibility of continued discomfort. If there is any permanency whatsoever, there is almost always future pain and suffering. Do not neglect to make the point during your negotiations and at trial if necessary. Experiencing some pain, even a little, for the rest of your life is no small thing. Insurance companies prefer to neglect such a fact, but jurors are impressed with the thought of pain that will last for the lifetime of a person.

§424 Suffering

You will note that I have separated pain and suffering into two categories. Personal injury attorneys have a tendency to lump pain and suffering together like “sugar and spice.” They are two completely different elements, however. Pain is the physical sensation one feels as a result of an injury. Suffering is the emotional and mental aspects of that pain. A person’s back may be in pain, but the fact that the injured party cannot bowl, play with his grandchildren, or make love to his wife are the elements of suffering that accompany the pain. Suffering can be documented by imaginative use of any of the following:

To have your free maximizing-damages chapter e-mailed to you, fill in the
blanks below and press Submit. The chapters available are listed above.