We have all seen stories of lawsuits filed seeking tens of millions of dollars. Does that mean the plaintiff gets that amount if they win? Who pays that? What do you have to prove?
We’ll try to explain how the civil justice system works as far as damages by reviewing one of our recent case settlements. The upshot? How much you can win in an injury lawsuit depends on a lot of factors, including the all-important insurance policy limits.
A lawsuit is begun when the injured party seeking damages, the plaintiff, files a document known as a complaint, which explains what happened, why the defendant is responsible, and what damages were sustained.
The very end of the document includes a prayer for relief. In most state court injury cases, it will seek either “less than” or “in excess of” a specific amount. In Illinois, our courts are divided into the Municipal Department and the Law Division. Municipal (“Muni”) includes cases valued at less than $50,000, while Law is for those seeking more than that amount.
So a complaint can ask for “in excess of $50,000” or “a hundred trillion dollars” and it will wind up in Law Division either way. Put in legalese, $50,000 is the "jurisdictional" amount that gets you into the Law Division.
What you get ultimately is what you can prove. File a claim for a hundred trillion dollars for a sprained ankle and the jury will give you the same amount for your sprained ankle as it would have if you just asked for more than the jurisdictional amount. And if the jury or judge didn’t think the other party did anything wrong, you’d get nothing no matter what you asked for in the complaint.
Many high profile cases have complaints seeking multiples of a million dollars, mostly because the press will report it that way and it gets attention. In the end, every legal battle comes down to whether the defendant owed the plaintiff a duty, whether that duty was breached, whether that breach caused injury to the plaintiff, and what those damages are.
Almost every injury case revolves around what the insurance limits are for that particular defendant. You might go to trial on a case where the defendant had an insurance policy with upper limits of $100,000. If the jury thought you deserved $1 million, the insurer would still generally just pay $100,000 — the amount of its policy limits.
Of course your verdict is against the defendant (whoever was at fault for your injury), not the insurer. So you could try to collect the remaining $900,000 from the defendant. But, in many cases, collecting the rest from the defendant would be difficult. Your average careless driver does not have $900,000 laying around. And the law does not force people to sell everything they own or give up all their savings even after they lose a lawsuit; individuals are allowed exemptions for certain things (some cash, vehicle of limited value, place to live). So a large judgment against most people is likely to be impossible to collect. Also, a defendant can file bankruptcy to avoid paying personally.
Further, if you do receive an offer from an insurance company in lieu of trial, it usually comes with the requirement that you release the insurer and the insured from any further liability.
For those reasons, the insurance policy governs the realistic value of the case in the vast majority of cases.
All you have to do is read your “declarations page” of your insurance policy, which will tell you the amounts and types of coverage you have.
How does a lawyer find out what a defendant has?
In motor vehicle cases, the Illinois Insurance Code (215 ILCS 5/143.24b) allows anyone to demand the policy limits be disclosed within 30 days. Our office utilizes this on every motor vehicle case in our initial letter to the defendant’s insurer.
There is a provision in Illinois law that allows for a finding of “bad faith” against the insurance company if it does not promptly tender the policy limits if the facts mandate that. In other words, if it is pretty clear the defendant is responsible for the injury and the injury caused damages at or above the policy limits, the insurer should pay the injured person the policy limits. If the insurer doesn't pay and the injured person sues, the law can make the insurance company liable for attorney fees in addition to the entire amount of any verdict, especially if the verdict exceeds the policy limits.
In Jennifer’s car accident case, she was struck from behind by another vehicle. She is in her late 40s and has had prior back surgery. When I initially interviewed her, I did not believe her injuries would be that bad from this particular incident.
Nevertheless, I asked for the policy limits from Country Financial and they were significant: $250,000.
Then, as Jennifer's treatment continued for nearly a year, it became apparent her back pain was not improving. In fact, her doctor was recommending another spinal surgery. She underwent an operation to remove the offending portion of her lumbar disc that was pressing on her nerves and causing pain. It was successful, and she is now fully recovered. But she incurred significant expenses.
With the two-year deadline to file a lawsuit coming closer by the moment, in late 2018, we submitted our demand packet to the Country Financial adjuster. Our materials included all the medical records and bills along with our demand that the entire policy limits of $250,000 be paid immediately or a lawsuit would be instituted against its client.
This was the key: the threat of a lawsuit. After we had submitted evidence of Jennifer's damages, a possible lawsuit and an “excess verdict” pushed Country Financial to tender its limits of $250,000 within several days after my letter.
As in all cases involving injury and potential liability, immediately get medical treatment, report the crash to police and your own insurance company if you have been in a motor vehicle accident, and contact a personal injury lawyer.
If you've been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.