I recently read an article by Steven Gursten regarding the potential risks that people may expose themselves to when they choose to represent themselves, rather than hire an experienced personal injury attorney.
In his article, Mr. Gursten describes a common scenario he sees in his daily practice, where an insurance adjuster will essentially stalk a personal injury victim to bully them into accepting a settlement without hiring an attorney. As Gursten states:
“The insurance industry estimates that when an attorney becomes involved, the settlement value of any car accident claim increases fourfold. That’s why so many insurance companies essentially stalk accident victims – to prevent them from hiring an experienced personal injury attorney.”
Mr. Gursten’s article highlights the important question that most injured people ask themselves after being hurt in an accident - should they represent themselves or hire an attorney? Most people wisely decide to hire an attorney. The old expression, “A person who represents him or herself on a legal matter has a fool for a client” is apropos to my discussion here.
At issue is not whether an injured person is educated or smart enough to handle a personal injury claim themselves. Most people have enough intelligence to understand the issues that typically arise in a car accident case. The problem is that they don’t have the training and experience to recognize the significance of most of the issues that could arise.
The Release of All Claims – There’s no going back!
For example, when an insurance adjuster offers to make a settlement in exchange for a signed release of all claims, many people mistakenly think that if they develop future medical issues from injuries caused by the accident, that their claim can be re-opened. Unfortunately, this is not true in Washington State. Settlement releases (including the “hold harmless” language nearly always included in releases) are virtually iron clad and cannot be broken later, even if the person made a mistake and should not have agreed to the settlement. Thus, an experienced personal injury lawyer knows not to have the client accept a settlement offer until the client’s doctors have cleared them from further medical treatment. Further, the “hold harmless” language makes the injured person a guarantor that all accident related bills have been or will be paid, and if the insurance company has to make any further payments related to the accident, they can go after the injured person and not only make them pay those outstanding bills but also pay for the insurance company’s attorney fees incurred in getting those bills paid. Talk about rubbing salt in the wound.
Subrogation – the devil is in the details
Other surprises can await the unwary person who signs a release in early settlement with an adjuster. For example, many people don’t realize that from the settlement funds, they need to re-pay any insurance companies that have paid for accident-related medical treatment. This is called subrogation; see my video on the topic at this link. Further, the injured person also must pay any outstanding bills from doctors who have provided treatment for accident related injuries, which are called medical liens. A settlement amount, which may have seemed reasonable from the adjuster, quickly disappears as subrogation claims are paid or deducted.
Further, an experienced personal injury lawyer is often able to get significant reductions, and in some cases complete waivers, of the obligation to pay subrogation claims. Thus, an unrepresented person who settles with an adjuster may lose a significant portion of their settlement after paying subrogation to insurance companies and paying outstanding bills owed to treating doctors.
On the other hand, an experienced attorney will advise the client about all the costs of settling prior to signing any settlement release, and the attorney will also negotiate with lien holders to try to obtain reductions on behalf of their client, all of which leads to a higher net settlement and no unpleasant surprises for the client.
Your attorney usually gets a settlement that covers legal fees – plus some!
Unfortunately, insurance companies know that most people don’t have the legal experience in personal injury matters to know what damages they are entitled to, and what the value of those damages is. As a result, adjusters commonly make lower offers to unrepresented people than they do to people who have attorneys. Most people with an experienced attorney will be able to get a settlement offer which is sufficiently higher to cover and exceed the attorney fees. This, combined with the benefit of avoiding these risks and loopholes of the settlement process, ensures that hiring an attorney is the safest, easiest way to proceed with a personal injury claim.
Are there ever cases where a person might wish to represent themselves in negotiating a settlement with an adjuster? Of course. But without the knowledge or experience of a personal injury attorney, accepting such a settlement offer carries significant risks and may expose a person to claims for reimbursement by healthcare providers and/or insurance companies, which could reduce or even wipe out a settlement amount.