Settling Your Santa Clarita Injury Case Takes Negotiation

Mandatory Settlement Conferences: How California Personal Injury Cases Get Settled Before Trial

In many California personal injury cases that proceed into litigation, there comes a point when settlement becomes a realistic and important possibility. By that stage, the parties have usually exchanged substantial information, the plaintiff's medical condition has become clearer, and both sides have a better understanding of the strengths and weaknesses of the case. A Mandatory Settlement Conference (MSC) can provide an important opportunity to resolve the case before the expense, uncertainty, and risk of a jury trial.

A settlement conference is not simply a meeting where the lawyers announce their "final offers." Settlement negotiations often require patience, flexibility, and a willingness to move gradually toward a resolution. In my experience handling personal injury cases on both the plaintiff and defense sides, cases are sometimes settled only after many rounds of negotiation.

Key Takeaways

• A Mandatory Settlement Conference is an important opportunity to resolve a personal injury case before trial.
• The purpose of an MSC is to encourage the parties to reach a mutually acceptable settlement.
• You should not expect the first settlement offer to be the other side's best offer. Negotiations often involve multiple offers and counteroffers.
• Patience can be important during settlement negotiations. Moving too quickly to a "final" position can unnecessarily limit the possibility of reaching an agreement.
• Your lawyer should understand both the strengths and weaknesses of your case before entering settlement negotiations.
• A settlement conference does not guarantee that the case will settle. If the parties cannot reach an agreement, the case can continue toward trial.
• The settlement officer or judge does not decide the case at an MSC. The parties ultimately decide whether to accept a settlement.
• A successful settlement can eliminate the uncertainty, expense, and stress associated with taking a personal injury case to trial.

What Is a Mandatory Settlement Conference?

A Mandatory Settlement Conference is a court-supervised opportunity for the parties in a civil case to attempt to resolve their dispute before trial. In an appropriate case, the court may require the parties and their attorneys to participate in the process and to make a genuine effort to settle the case.

The exact procedures can vary depending on the court, the assigned judge, and the circumstances of the case. The important point for a personal injury plaintiff is that an MSC is an opportunity to resolve the case without asking a jury to decide who should win and how much compensation should be awarded.

When Does a Personal Injury Case Become Ready for Settlement?

Settlement can occur at virtually any stage of a personal injury case, including before a lawsuit is filed. However, settlement negotiations often become more productive after the parties have exchanged enough information to evaluate the case realistically.

For an injured plaintiff, that may mean understanding the nature of the injuries, the treatment that has been required, the amount of medical expenses, any lost income, and the plaintiff's current medical condition. The defense will also evaluate liability, causation, damages, insurance coverage, and potential weaknesses in the plaintiff's case.

Why Don't Insurance Companies Simply Make Their Best Offer First?

Settlement negotiations are rarely that simple. An insurance company evaluates a claim based on many factors, including its assessment of liability, the available evidence, the plaintiff's medical treatment, comparable cases, litigation risks, and the potential cost of taking the matter through trial.

The first offer may therefore be considerably lower than the amount the insurer ultimately becomes willing to pay. That does not mean that every case should involve endless negotiations or that an attorney should reject a reasonable offer simply to keep bargaining. Rather, the parties need to understand that settlement is often a process rather than a single conversation.

Why Is "Haggling" Sometimes Part of Settlement Negotiations?

Settlement negotiations can sometimes resemble a carefully controlled negotiation in which each side uses its offers and counteroffers to communicate how seriously it is approaching settlement. A large movement in one direction may signal that a party is becoming more flexible, while a small movement may communicate that the party is approaching its limit.

I once participated in a settlement conference where the defense initially offered only $4,000 on a case that we believed was worth substantially more. We began much higher than the amount we ultimately expected to accept, and the parties continued exchanging offers over the course of the conference.

Eventually, after numerous rounds of negotiation, the parties reached a settlement of $75,000. The result was possible because neither side treated its initial position as its "final offer." Both sides continued negotiating while communicating their willingness to compromise.

Why Should You Avoid Giving a "Final Offer" Too Early?

Once a party announces that a particular number is its absolute final position, it can become difficult to move without appearing to contradict that representation. In some circumstances, declaring a final number too early can cause negotiations to stop before the parties have fully explored the possibility of settlement.

That does not mean an attorney should negotiate indefinitely or refuse to establish a realistic settlement position. A good settlement strategy involves understanding the value and risks of the case and using negotiation deliberately rather than simply moving numbers back and forth without a purpose.

What Role Does the Settlement Officer Play?

A settlement officer's role is generally to help the parties communicate and explore whether a settlement can be reached. Depending on the circumstances, the settlement officer may meet with both sides together or speak privately with each side and then communicate between the parties.

This process is sometimes called shuttle diplomacy. The settlement officer may help each side understand the risks identified by the opposing party, challenge unrealistic expectations, and encourage movement when the circumstances suggest that a settlement may be possible.

A skilled settlement officer can be particularly valuable when the lawyers and their clients have become entrenched in their respective positions. Sometimes an independent person pointing out the risks of trial can accomplish something that the opposing attorney cannot.

Does a Mandatory Settlement Conference Mean My Case Will Settle?

No. The fact that the court requires the parties to participate in a settlement conference does not mean that either side is required to accept a settlement. The parties retain control over whether they ultimately agree to resolve the case.

If the parties cannot reach an acceptable agreement, the case generally continues toward trial or whatever other proceedings are scheduled. However, even an unsuccessful settlement conference can be useful because it may give both sides a better understanding of the opposing party's position and the risks involved in continuing the litigation.

Why Is Settlement Often Preferable to Trial?

Even a strong personal injury case involves uncertainty when it goes before a jury. No attorney can guarantee what a jury will believe, how it will evaluate the evidence, or how much it will award if the plaintiff prevails.

Trial also takes time and money. Witnesses must be prepared, experts may need to testify, exhibits must be organized, and attorneys must devote substantial resources to preparing the case. A negotiated settlement allows the plaintiff to obtain a guaranteed result rather than taking the risk of leaving the outcome entirely in the hands of a judge or jury.

How Should a Plaintiff Prepare for a Mandatory Settlement Conference?

A plaintiff should understand the important facts and issues in the case before attending an MSC. This includes understanding the injuries, medical treatment, claimed damages, liability arguments, available insurance coverage, and any significant weaknesses that the defense may raise.

Just as importantly, the plaintiff should have a realistic understanding of settlement. Your attorney should discuss the strengths and weaknesses of your case with you and explain the risks of accepting a particular settlement versus proceeding to trial. The final decision about whether to settle generally belongs to the client.

What Can We Learn From Settlement Negotiations?

One of the most important lessons from settlement negotiations is that both sides have risks. The plaintiff risks receiving less than expected—or potentially receiving nothing—if the case goes to trial. The defendant and its insurance carrier face the possibility that the jury will award substantially more than the amount being demanded during settlement negotiations.

The purpose of negotiation is to find a number that both sides can accept in light of those risks. Sometimes that number is far from where either side started. The willingness to continue communicating, evaluate new information, and compromise can make the difference between a case that settles and one that proceeds to trial.

Frequently Asked Questions

1. What is a Mandatory Settlement Conference in a California personal injury case?

A Mandatory Settlement Conference is a court-supervised settlement opportunity in which the parties and their attorneys attempt to resolve a civil case before trial. The parties are generally expected to participate in the process and make a genuine effort to reach an agreement.

2. Do I have to settle my case at a Mandatory Settlement Conference?

No. Although participation may be mandatory, you are not required to accept a settlement that you do not believe is appropriate. If the parties cannot reach an agreement, the case can continue toward trial.

3. Who decides whether my personal injury case settles?

The client ultimately decides whether to accept a settlement of his or her personal injury claim. Your attorney should provide advice about the strengths, weaknesses, risks, and potential value of the case, but the decision to settle belongs to the client.

4. Should I accept the insurance company's first offer?

Not necessarily. The first offer may be a starting point for negotiations rather than the insurer's best offer. Your attorney should evaluate the offer in light of the evidence, damages, available insurance coverage, litigation risks, and the overall circumstances of the case.

5. Why do lawyers exchange so many settlement offers?

Each offer and counteroffer can communicate information about how seriously each side is approaching settlement and how much flexibility it may have. Negotiations sometimes require several rounds before the parties reach a number that both sides consider acceptable.

6. What happens if the Mandatory Settlement Conference does not result in a settlement?

If the parties cannot reach an agreement, the case generally continues toward trial. An unsuccessful settlement conference does not mean the plaintiff has lost the case; it simply means the parties were unable to reach a mutually acceptable resolution at that point in the litigation.

7. Can a settlement officer force the insurance company to pay me?

No. A settlement officer can facilitate negotiations, identify risks, and encourage compromise, but cannot ordinarily force either side to accept a particular settlement amount.

8. Why might settling be better than going to trial?

Settlement provides certainty and avoids many of the risks and expenses associated with trial. Even when a plaintiff has a strong case, there is always uncertainty about how a jury will evaluate liability, medical evidence, credibility, and damages.

9. What should I discuss with my lawyer before the settlement conference?

Discuss the strengths and weaknesses of your case, the evidence supporting your injuries and damages, the arguments the defense is likely to make, available insurance coverage, and the range of settlement you would consider acceptable. You should also understand what risks you face if you reject a settlement and proceed to trial.

10. Is a Mandatory Settlement Conference the same thing as mediation?

They are similar in that both involve a neutral third party attempting to help the parties reach a settlement, but they are not necessarily the same process. An MSC is part of the court's litigation process, while mediation is generally a separate dispute-resolution process that can occur voluntarily or pursuant to court procedures.