Whether an offer is reasonable or not depends on many factors, including your own subjective opinion on what you determined to be the value of your personal injury case. While your opinion on the value of your own claim is not solely determinative, only you (and not your attorney) has the authority to accept or reject an offer.
However, the best indicator of the value of a case is what eight random people believe is the value of your case. A civil jury case is typically comprised of eight random individuals that live in the same county in which you would litigate your case.
Though your case will likely never be litigated before a jury (as many cases settle or are arbitrated before that occurs), the value of any settlement is most often determined by how eight random people would decide your claim.
To determine the value, you should first know what facts and legal standards a jury would be required to consider in deciding your case. In Arizona, accident victims are legally entitled to claim the following damages: (1) nature, extent and duration of any injury caused by the person at fault; (2) pain, discomfort, suffering, disability, disfigurement, and anxiety already experienced and reasonably probable to be experienced in the future as a result of the injury; (3) reasonable expenses of necessary medical care, treatment and services rendered and reasonably probable to be incurred in the future;
(4) lost earnings and any decrease in earning power or capacity in the future; (5) loss of enjoyment of life, participation in life’s activities to the quality and extent normally enjoyed before the injury and in some more extreme injury cases, (6) the loss of the love, care and affection and other pleasures of a marital relationship affected by the injuries. Injuries that existed prior to the claim, while not compensable, may be compensable to the extent such injuries were aggravated or made worse by the incident that is the subject of the claim.
It is your burden to prove these injuries and eight random people may agree with none, some or all, and compensate you accordingly. This is the standard by which you must measure your claim and its value in order to determine whether an offer is reasonable.
Thus, you should ask yourself the following: (1) Does the offer to compromise my claim consider each of these types of damages of which I may be entitled?; and (2) Can I prove each of these claims (i.e. is it more probable than not that I should be entitled to be compensated for some or all of these types of damages based on the evidence of my case?).
Once you reason through this process, you can determine a range of probable values to determine whether the offer is reasonable. For example, you may reason that on your best day in court you will get $10,000 while on your worst day in court you might get nothing. You should then base a value, not on your best and worst days (both of which are possible), but on what you think would be probable (more likely than not). Then you should consider the cost of litigation.
While settlements are usually looked upon positively, a settlement means you are willing take something less than what you want; hence the word “settle.” The cost of litigation is inevitable if you cannot resolve your case through settlement. This usually takes the form of increased attorney fees (many firms increase their fee percentage if the firm must file a lawsuit), and increased costs such as filing fees, deposition fees, which will be paid by the client at the resolution of the case (by settlement or verdict).
Thus, settling for $10,000 today may be equal to or more than a verdict for a greater amount from a jury a year from now. While you may get $15,000 by verdict, the amount of fees and costs may offset the net amount you ultimately receive. This also does not account for the time cost or potential risks of trial. A settlement will alleviate your continued participation, including your need to answer discovery requests, attend a deposition, attend a medical exam, and attend a several day trial.
In addition, litigation takes months and sometimes years after filing your case with a court. Time is a subjective factor that should and often does play a role in whether a settlement offer is reasonable or not.
Outside extreme offers to settle, determining whether a settlement offer is reasonable is dependent upon the specific facts of your case as well as your own subjective feelings and concerns about the case and litigation.