Understanding the Process of Settlement Negotiations

On This Page

1. What Is a Settlement?
2. Step 1: Case Investigation
3. Step 2: Sending a Demand Letter
4. Step 3: The Negotiation Process
5. Step 4: Reaching a Settlement or Filing a Lawsuit
6. Why it is Critical to Have Legal Representation

REVIEWED BY

C. William Kenny

April 04, 2025

Board certified by National Board of Trial Advocacy

When you have been injured due to someone else’s negligence, a common concern is how will you get compensation for your losses. Most personal injury cases do not go to trial, instead, they are resolved through settlement negotiations. Understanding how this process works can help you stay informed and prepared as your case progresses.

What Is a Settlement?

A settlement is an agreement between you (the injured party) and the at-fault party’s insurance company. Rather than going through a lengthy trial, both sides agree on an amount of money that compensates you for your injuries, medical expenses, lost wages and other damages. Settlement negotiations aim to resolve the case efficiently, fairly and without the uncertainty of court.

Step 1: Case Investigation

Before negotiations begin, your attorney will conduct a detailed investigation into your case. This includes reviewing accident reports, collecting medical records, speaking to witnesses and documenting all your injuries and related expenses. A strong foundation of evidence is critical to building a compelling demand for compensation.

Step 2: Sending a Demand Letter

Once your attorney has all the facts, they will draft and send a demand letter to the insurance company. This letter details what happened, why the other party is at fault and the total amount being requested. It also includes a breakdown of your damages such as medical bills, lost wages, pain and suffering and any future expenses.

Step 3: The Negotiation Process

After receiving the demand letter, the insurance company will respond; usually with a counteroffer that is lower than your original demand. From there, your attorney and the insurance adjuster will enter negotiations, discussing the strengths and weaknesses of the case and moving toward a potential agreement.

This process can take time. Insurance companies may try to delay or pressure you into accepting a low offer, but your attorney’s job is to push back and fight for what is fair. You will be kept in the loop every step of the way and advised when it may be smart to accept an offer or hold out for more.

Step 4: Reaching a Settlement or Filing a Lawsuit

If both sides agree on an amount, the settlement is finalized, and you will receive compensation shortly thereafter. However, if negotiations are stalled and no fair agreement can be reached, your attorney may recommend filing a lawsuit and preparing for trial.

Why it is Critical to Have Legal Representation

Insurance companies deal with claims every day and they want to pay out as little as possible. Without legal help, you risk settling for far less than you deserve. A skilled personal injury lawyer knows how to value your case accurately and negotiate effectively on your behalf.

Recovering Compensation After an Accident

Settlement negotiations are often the best way to resolve a personal injury claim, but they require strategy, patience and experience. With the right legal team in your corner, you can focus on healing while your attorney focuses on securing the compensation you need to move forward. Contact the attorneys of Berger and Green for a free case evaluation.