Avoid This Costly Mistake When Settling a Case
As litigation ends, it can be tempting to finalize the case as quickly as possible. However, if your client has not been adequately informed of all the settlement payment options, it could create significant issues for all parties. Keep reading to learn more about steps that will allow your client to make informed decisions.
When Comprehensive Options Aren’t Offered: A Case Study
A widely cited instance of failing to provide all settlement options is Grillo v Pettiete et al. (96-45090-92, 96th District Court, Tarrant County, Texas). The claim arose after Christina Grillo’s medical care quickly depleted her $2.5 million medical malpractice cash settlement. Grillo had suffered quadriplegia, blindness, and seizures due to a birth injury. Life care plans had estimated her lifetime medical costs at $20 million.
The Grillo family sued Christina’s attorneys and guardian ad litem for negligence and legal malpractice. Grillo’s attorneys had accepted a cash lump sum settlement rather than recommending a defense-proposed $1.2 million structured settlement, which would have paid more than $100 million. The legal malpractice lawsuit also claimed that Grillo’s attorneys had failed to establish a Special Needs Trust, which would have preserved Medicaid access.
In the original case, a settlement consultant likely would have recommended a structured settlement and a Special Needs Trust, combined with a smaller lump sum cash payment to cover immediate needs. That’s what the Grillo family did with the legal malpractice settlement. Engaging a settlement consultant to handle the original claim would have protected all parties and prevented further litigation.
Start Early and Arm Yourself for Mediation
Beginning the education process early is critical. Ideally, the settlement consultant has met with your client before mediation to assess needs, goals, and obstacles. The consultant may suggest utilizing tools such as a life care plan or medical cost projection, a Medicare Set-Aside allocation, or rated ages. These detailed calculations provide an estimate of your client’s lifetime medical and non-medical needs so that you can determine an accurate demand.
Your settlement consultant will also attend mediation in person or remotely to provide real-time calculations, minimizing delays. If there is a gap between offer and demand, your consultant can craft a proposal that bridges the gap.
Review the Options and Establish Safeguards
Before finalizing, your consultant will walk your client through suitable settlement options. As an additional layer of protection, disclaimers can be signed to show that your client has been adequately advised of all options. The settlement consultant will also provide appropriate language for the settlement agreement allowing your client to structure and allowing you to structure your contingency fees if desired.
Contact Sage for Settlement Planning Assistance
It cannot be emphasized enough—client education is essential. Your consultant will help prevent missed steps and ensure that your client has the information necessary for making informed decisions. For more information, contact Sage Settlement Consulting today.