Unhappy With Your Settlement and Want to Get Out of It?

Tearing up Settlement

So you’ve settled your personal injury claim and you now have a huge case of buyer’s remorse. You wish there was something you could do to get out of that agreement. In most cases, as long as you orally gave your lawyer authority to settle for a certain amount on your behalf, there isn’t anything you can do. However, in some there is. Before doing anything rash, I strongly advise discussing the matter with your lawyer. There may be something he can do to satisfy you, such as agreeing to a reduced fee. He may be able to explain to you why you didn’t receive as much as you thought you would. One thing is certain, though. He will not want to try to get out of the settlement, and usually for good reason.

Unhappy With Your Settlement? Why?

Clearly, if you are unhappy with your settlement it is because you received less than the amount you wanted after attorney’s fees, costs, and medical liens (including a lien by your health insurer) were taken out. There are any number of reasons why this would happen. First, the defendant may not have had adequate insurance to cover your damages. If you have $60,000.00 in damages, but the defendant only has $50,000.00 in liability insurance, there’s not a whole lot you can do to make up that $10,000.00 shortfall. In most cases, it is simply not worth it to sue the defendant individually for the remaining damages, as most people with inadequate insurance coverage can’t afford to pay a judgment. If this is your problem, you’re going to have to suck it up. You got the most you could, and getting out of your settlement won’t change that. The best you can hope for is that your attorney may reduce his fee. Note that he does not have to do this, so don’t try to strong-arm him into it. Play to his sympathy, and hope that he can cut you a break.

Another reason you may be getting less than you wanted is that you overtreated. Put simply, you went to the doctor (or chiropractor) more than was reasonable, given your injuries. $20,000.00 in chiropractor bills for a whiplash injury is too much. If you find yourself in this situation, your lawyer can try to get the medical provider to reduce his bill. It would behoove you to apply pressure to the medical provider as well. After all, you were just following the provider’s advice in treating so much. As with the case of too little liability insurance, getting out of your settlement won’t fix this problem.

The third most likely reason that you didn’t get as much as you wanted is because your case had “liability” or “causation” problems. This means that had you gone to trial, there was a good chance that a jury could find for the defendant (leaving you with nothing). Liability refers to whether the defendant was negligent. Causation refers to whether the damages you suffered were actually caused by the accident, as opposed to being pre-existing, entirely unrelated, or caused by a later incident. A fair settlement in cases involving these issues will often be determined by multiplying your odds of winning by the full value of your damages (e.g., in a case where your full damages are $100,000.00, but there is a 50% chance you would recover nothing if you went to trial, a $50,000.00 settlement would be fair). Obviously, figuring out your odds of winning involves a certain amount of speculation, but an experienced lawyer tends to get a good feel for these things.

Getting out of a settlement agreement in a case with liability or causation may ultimately improve your outcome — a jury may find completely in your favor and award you your full damages. On the other hand, you may recover nothing, making you even more unhappy. This is the only scenario where you should even think of trying to get out of your settlement.

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In Most Cases, You Can’t Get Out of Your Settlement

If you have agreed in writing to a settlement, whether at mediation or through an informal settlement where you’ve already signed a release, you’re pretty much stuck with the settlement. The only circumstance I can envision where a court might set aside such an agreement (which is a contract, after all) is if the defendant induced you to sign the agreement through fraud, or through what is known as a “mutual mistake.”

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In the only cases with which I am familiar, the fraud or mistake used to rescind the settlement related to the amount of the defendant’s insurance coverage. In other words, the defendant had higher insurance limits than he said, and the settlement was only for the amount of the insurance stated, based on the plaintiff’s belief that this was all that was available. Fraud makes it more likely that the settlement will be set aside, but “mutual mistake” (defendant didn’t intentionally misrepresent his limits) is still an avenue worth pursuing in these cases. Your lawyer will be fully on board with getting you out of your settlement agreement should it turn out that there’s more insurance available. Again, this only applies if you settled for what you thought was the full policy limits. If you settled for $40,000.00 under the belief that the defendant had $50,000.00 in coverage, it makes no difference if the defendant actually had $100,000.00. You’ve shown that the additional coverage wasn’t necessary to settle your case.

Getting Out of Your Bad Settlement Through the Back Door

After telling you why you shouldn’t try to get out of your settlement (in 99% of cases) and the consequences of doing so, I’ll tell you one trick that may work under certain circumstances. Confidentiality clauses are routinely included in settlement agreements and releases, but are often not mentioned to the plaintiff until the time comes to sign the agreement. If you (1) haven’t yet signed a release or settlement agreement and (2) you never orally agreed to a confidentiality agreement (even to your own lawyer), you can refuse to sign any settlement agreement that contains a confidentiality clause. Tell them that while you agreed to a dollar amount, you never agreed to confidentiality. Most insurance companies will require this as part of a settlement, so your refusal to agree to confidentiality could result in the whole settlement going away (due to their being no true “meeting of the minds” between the parties when the agreement was reached). If the insurer relents and takes out the confidentiality provision, you’re stuck again and you’ll have to sign. In rare cases, the insurer may offer some more money as consideration for the confidentiality (but don’t count on it).

I will warn you right now that any attempt to revoke or avoid your settlement will likely piss off your lawyer. He may fire you over it. You will probably later regret not having taken the settlement. But if you’re mind is made up that you want out of that settlement, this is the best trick I can think of to make that happen.

You may ask, why don’t I just refuse to sign the agreement even if I had agreed to it orally? Well, that’s because the defendant will file a Motion to Enforce Settlement Agreement with the court, and the court will order you to sign it. This is the same tool that keeps a defendant from reneging on a settlement.

If You Get Out of Your Settlement, Will You Really Be Better Off?

If you’re unhappy with your settlement, make sure that there’s nothing your lawyer or lienholders can’t do to satisfy you before trying to get out of your agreement. There was a reason you agreed to the settlement in the first place. Remember that position of uncertainty you were in before you agreed to settle? Think of being in that position again, but now you have a pissed off lawyer (or no lawyer), a pissed off defendant (who will likely not make you any further settlement offers), and practically a guarantee that your case will have to go to trial. Is it worth it?

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