Articles

When Should Suit be Filed?

By: Joseph L. Vaccaro, CCLA
Sr. Paralegal / Insurance Specialist

This can be a tough question to answer. Consider the following quote from a book I once read, “…As lawyers we tend to immediately turn to litigation to resolve disputes when settlement is not easily obtained. In many cases if lawyers worked as hard at preparing at attempting to settle the case as they do at litigating, many claims could be resolved without the need to litigate.  Litigation often results from the attorney’s failure to perform the investigation and obtain the facts necessary to convince the insurer that they should settle the claim.   You just can’t tell an insurer that you are going to sue if they don’t settle and expect results.  You have to show them where they are wrong or where they are at risk.  In order to accomplish that, you have to have the facts.  In too many cases attorneys try to cram a settlement down an insurer’s throat without adequate preparation. Failing to accomplish this, they resort to litigation and proceed to gather from deposition and other discovery methods, the facts they should have had in the first place.  All of this, of course, substantially increases the risk, expense, and delay for the client which may have been avoidable.  Nonetheless, litigation continues to be useful for asserting leverage on the insurer or in those cases where proper discovery or settlement cannot otherwise be obtained…”   I totally agree with this premise.  I also can’t resist adding that here is where good pre-litigation paralegals can add tremendous value to your practice.

Let’s consider some types of cases where serious consideration needs to be given to filing suit early.  When you have an elderly client, special consideration has to be given to that client’s health and longevity.  If there is a chance that they may pass away in the foreseeable future, then this is a case that should go into litigation without delay once you are aware of what the case is all about.  You should make every attempt to put the case on “fast track.”  The case should be pushed so that it reaches a settlement posture early and it settles sooner than later allowing your client the satisfaction of the “thrill of victory”.

There are a number of companies (you know who they are) that will not deal with you seriously until you have the case in litigation.  Companies that fall into this category typically offer you very little money pre-suit.  The only way to secure a fair settlement from such a company is with the threat of an impending jury trial. 

Cases involving automotive product liability, rarely if ever, settle unless the case is in suit and the car manufacturer is staring at an imminent trial date.  Be aware however, that filing suit early in such cases does not mean failing to do the necessary investigation to obtain as many facts as you can pre-suit. This type of litigation is quite expensive and the failure to do your pre-suit homework could end up becoming a financial disaster in cost containment. When considering this type of litigation,  serious cost benefit analysis must be completed.

It is also a rare situation when a medical malpractice claim resolves pre-suit. Unless liability is painfully obvious (i.e., the operating table was left inside your client before they sewed them up), it is unlikely such claims will settle pre-suit.  Here again, one must be cognizant of the cost benefit in pursuing such cases and do their pre-suit homework in investigating and researching such cases.

Self-insured defendants are a special breed depending whom you are dealing with.  Self-insured governmental entities often are more difficult to work with then self-insured non-governmental entities.  Many times in dealing with self-insured entities, it comes down to who the adjuster is and your relationship with them. Typically the adjuster will tell you whether you’re going to be able to settle the case pre-suit or if litigation will be needed before you get any serious offers.

When dealing with bad faith claims, suit is almost inevitable as insurance carriers will rarely admit that they have committed bad faith.  While most carriers are willing to settle claims pre-suit for which they’ve received an insurance premium, it is a rare situation when a carrier is willing to settle a case where they have to spend money for which they have not received an insurance premium.

Having made the decision to file suit it is incumbent upon the attorney to pursue the litigation zealously. There is no better catalyst to motivate a recalcitrant defendant into settlement negotiations than an imminent trial date.