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The Sphere of Influence in Claim Settlement

Posted by Richard Spiers on July 10, 2017 at 8:48 PM

With nearly four decades of experience in the insurance field, Richard Spiers has dealt with a myriad of claims nationwide. A Northern Illinois University graduate, Richard Spiers is the vice president at Genesis Management and Insurance Services, as well as a member of the CPCU society.

The question of whether to settle a claim or take it to court is an interesting one. According to Spiers, there is a reasonable incentive to take the claimant to trial if the claimant's demands are unreasonable or the facts support the defendant. But before such a move is validated, a few pre-trial aspects must not be overlooked.

Things to Consider Before Going to Trial

Reputation is a major variable to consider when deciding whether or not to go to trial. If a town or a county has already dealt with similar cases or publicized them, then it can be more problematic for the defense. One recommendation is to read the comments found in local newspaper articles or other publications that pertain to similar cases that occurred within the area. These comments may serve as an indication of the general attitude toward those past cases and may help determine if litigation should be the next step.

Other factors that should be taken into account prior to any court action include:

  • Plaintiff attorney reputation: A surplus of attention may be brought to the case if the plaintiff has a well-known attorney.
  • Immunities: Immunities may not apply based on a number of factors, including if there is a heightened amount of publicity surrounding the case.
  • Venue: The direction that the trial may take varies depending on the location of the case.

The Economics Behind Deciding to Go to Trial

It is important to weigh the cost of going to trial versus the cost of any potential claim settlement. The cost of the court proceedings may include, but are not limited to, defense attorney fees and expert investigator fees. There are instances where the defense should also factor in publicity as an economic loss since it could possibly have a negative effect on the business.

Making the Decision to Go to Trial

The defense counsel ultimately calls the shots during litigation but opinions should be elicited from everyone who may have insight into integral facets of the case. For example, the city council, the mayor and insurance carriers may offer a glimpse into the potential jury’s mindset.

Often times, the defense will organize a mock trial complete with a mock jury in an effort to become more acquainted with the processes surrounding the case. For the sake of realism, the defense should acquire people from the same jury pool as the actual trial. A cheaper alternative to implementing a mock jury is developing a focus group. With a focus group, the defense gathers local residents to discuss the case and applies the insight collected from the discussion to the preparation for the trial.

Even if a favorable verdict seems to be a likely outcome, it may be worthwhile to strive for a settlement before the decision to go to trial is made. The plaintiff is often willing to settle for a lesser award when a dollar amount is offered up front, so it is worth a shot.