SETTLEMENT & RESOLUTION
8 legal terms in this category, with plain-English definitions and real-world car accident examples.
Arbitration
A private dispute resolution process where a neutral third party (arbitrator) hears both sides and makes a binding or non-binding decision, without going to court.
You and the insurance company can't agree on the value of your whiplash claim, so both sides present evidence to an arbitrator who awards you $45,000.
Demand Letter
A formal letter your attorney sends to the insurance company outlining your injuries, treatment, losses, and the amount of compensation you're demanding to settle.
Your lawyer sends a demand letter to the at-fault driver's insurer requesting $150,000, backed by medical records, bills, and documentation of your lost income.
Lump Sum Settlement
A single, one-time payment that resolves your entire claim. Once you accept it, you cannot come back for more money, even if your injuries get worse.
The insurance company offers you $75,000 as a lump sum. You sign the release, deposit the check, and the case is permanently closed.
Mediation
A voluntary negotiation process where a neutral mediator helps you and the insurance company reach a settlement agreement. Unlike arbitration, the mediator doesn't make a decision.
After months of failed negotiations, you and the insurer meet with a mediator who helps both sides find middle ground, resulting in a $95,000 settlement.
Release
A legal document you sign when accepting a settlement that permanently gives up your right to pursue any further claims against the at-fault party for this accident.
Before you receive your $60,000 settlement check, you must sign a release. Once signed, you can never come back for more money, even if your injuries worsen years later.
Settlement
An agreement between you and the insurance company (or at-fault party) to resolve your claim for an agreed-upon amount of money, without going to trial.
After months of negotiation, you and the insurance company agree to settle your whiplash claim for $45,000. You sign a release, and the case is over.
Structured Settlement
A settlement paid out in periodic installments over time (monthly, annually) rather than as a single lump sum. Often used for large settlements involving long-term care needs.
Instead of a $500,000 lump sum, you agree to a structured settlement that pays you $3,000/month for 20 years, providing steady income while you recover from a spinal cord injury.
Verdict
The jury's final decision in a trial, determining whether the defendant is liable and how much compensation you should receive.
After a week-long trial, the jury returns a verdict in your favor: $250,000 in damages against the driver who ran a red light and caused your spinal injury.
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