Discounts and the Value of Getting on with the Rest of Life

American society is built on the idea of fair market value. On supply and demand. On arm’s length transactions.

Our goal is to get as much money as possible for clients in the least amount of time. Sometimes that’s done by arbitrating or trying cases. But most of the time that’s done by negotiating settlements.

(Some people think that we’re negotiating about the value of what’s been lost. But what we’re really negotiating about is the value of a piece of paper that releases the at-fault party from claims. For all intents and purposes, we’re selling a release to the at-fault party’s insurance company.)

Most of the time we’re trying to get the most money possible for the release. But in some situations it makes sense to offer and accept a discount.

One of those situations is where the injured person really wants to put the claim behind them and get on with the rest of their lives. Having an open personal injury claim can feel exhausting. There’s the “visible” stuff you have to do. But maybe even more taxing is the “invisible” weight you have to carry. Part of that weight is feeling like every movement, activity, decision, etc. is being assessed and judged by the other side. And there’s also the burden of looking back at an unpleasant event rather than forward to the rest of your life.

When these feelings are really strong it makes sense to consider accepting less than you might be able to get if you arbitrated or tried the case. This comes up a lot in cases where liability limits and low. The limits can be accepted. Or the case can move forward to judgment and—absent something like a bankruptcy petition—collection action can continue on for the next 20 years.

A lot of people feel like if limits are offered now, they’ll take them so that they can get on with the rest of their lives. But if the insurance company isn’t going to make a fair offer (or does something even more suspicious like fails to disclose policy limits) then they’re not going to discount that release or make any compromises.

I think this kind of approach is reasonable and lines up pretty well with human nature: I’ll settle for $X now even though it’s low. But if you vex me, then the gloves are off.