What is a Personal Injury Settlement?

The Basics

A personal injury case is any claim in which physical, mental, or emotional harm has been done to someone due to the intentional actions or negligence of another party. If the claim goes to court you are the one who files the claim. You are the plaintiff, while the party at fault is the defendant. In personal injury cases, the defendant could be an insurance company, an individual, or their employer, depending on the circumstances of the claim.1

The most common types of personal injury cases include:
  • Product Liability
  • Defamation (Libel or Slander)
  • Medical Malpractice
  • Animal Bites
  • Car Accident
  • Wrongful Death
  • Slip & Fall Cases
  • Assault

There are four elements that must be proven for a negligence claim to be successful:

Duty of Care

The court must determine that:

a.) There is an established relationship between the two parties involved, and

b.) That the defendant had a responsibility to be careful in a given situation.

For example, a case where a biker or pedestrian is hit by a vehicle may constitute duty of care, since the driver is expected to exercise care by following traffic signals and sharing the roadways with others.2

Breach of Duty

The defendant must have failed to exercise reasonable care in a situation or plainly done something they shouldn’t have. This could include animal bites or car accidents which occur due to the lack of care taken by one party.2


The court must find that the harm was caused by the defendant either directly (actual cause) or indirectly (proximate cause). This could include car accidents, slip and falls, or any other circumstance where the plaintiff would not have suffered the injury but for the actions of the defendant.2


The plaintiff must be proven to have suffered an injury which can be rectified through financial compensation, such as payment for medical bills, lost earnings, or diminished quality of life. 2

How do Personal Injury Settlements Work?

When you file a personal injury claim for any reason, there are typically three possible outcomes, including:

Case Settled Without Trial

Many personal injury cases do not go to trial. Instead, many are settled beforehand. In this case, the plaintiff actually drops the lawsuit in exchange for a settlement that requires the defendant or their insurance company to pay for:

  • Medical Treatment
  • Lost Wages
  • Damaged Property Replacement or Repair
  • Compensation for Pain & Suffering

Plaintiff Wins Case at Trial

If your case goes to trial, there is typically a court process which will examine the circumstances surrounding your claim and determine whether or not the defendant owes compensation. In this scenario, the claim must be filed as a formal lawsuit for the trial to proceed. Once a judge or jury has ruled in your favor, you will be awarded compensation.3

Defendant Wins Case at Trial

In some cases, a judge might determine that the defendant is not at fault, meaning that you will be awarded no compensation. While this decision is usually difficult to overturn, there may be an opportunity for you to appeal the outcome.3

Your Personal Injury Compensation

Assuming that you win your personal injury case, it is important to remember that the compensation you receive is meant to return assets that were lost as a result of the injury, not necessarily improve your financial standing from what it was before the accident. For this reason, your lawyer may advise you to keep track of any and all expenses accrued during the aftermath of your injury. Things to consider when doing so include:4

  • Medical Bills
  • Medical Diagnoses
  • Lost Income
  • Pain & Suffering Damages
  • Length of Treatment
  • Damaged Property
  • Long-Term Treatment Expenses
  • Any Additional Related Expenses

Choosing Your Reimbursement

Once a fair compensation amount has been established, you may be given a choice between a one-time disbursement of funds or compensation in the form of a structured settlement. Depending on your specific circumstances, one way may be more effective than the other for you.

Selling Your Future Payments

While a structured settlement option may have seemed appropriate at the time your case settled, living circumstances can change. Milestones like expanding your family or purchasing a home can sometimes be difficult to achieve with your regular payment schedule.

However, if you find yourself in this situation, J.G. Wentworth can help. We are the industry leader when it comes to purchasing future structured settlement payments, assisting customers in getting the money they need, when they need it. If you are receiving payments from a personal injury settlement but they aren’t quite enough to help you reach your long-term goals, contact J.G. Wentworth today for a free quote in just a few minutes.


The above is some basic information on the topics, and is not a complete guide. J.G. Wentworth  is a purchaser of assets and does not provide legal, tax, or financial advice. Please contact independent professionals for legal, tax and/or financial advice.

  1. https://www.americanbar.org/groups/public_education/resources/law_issues_for_consumers/injury_typical.html
  2.  http://www.alllaw.com/articles/nolo/personal-injury/understanding-negligence.html
  3.  http://www.alllaw.com/resources/personal-injury/settle-your-personal-injury-claim
  4. https://www.americanbar.org/groups/public_education/resources/law_issues_for_consumers/injury_wincase.html

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