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5 Things You Should Know Before Agreeing to an Out of Court Settlement for A Personal Injury in New York

Posted by Michael Redenburg | Apr 13, 2023 | 0 Comments

5 Things You Should Know Before Agreeing to an Out of Court Settlement for A Personal Injury in New York

People sometimes contemplate whether to file a personal injury lawsuit for some reason. Taking a personal injury case to court may tarnish reputations, damage relationships, or even waste time and huge sums of money. However, these consequences can be avoided with an out-of-court settlement when the parties involved in the litigation decide to resolve the conflict by negotiation.

In New York, approximately 95% of all personal injury cases resolve out of court during the pre-trial phase and never get to the stage of a civil court trial. Recently, there have been several alternatives that can help avoid taking a personal injury case to court and produce win-win solutions for both parties. 

Below are 5 Major things you should know before agreeing to an out-of-court settlement for a personal injury in New York;

1. Alternative Dispute Resolution ADR

Alternative Dispute Resolution ADR is a form of out-of-court settlement; it refers to different ways parties can resolve issues without going to court. There are different forms of ADR which are; 

  • Neutral Evaluation
  • Conciliation
  • Negotiation
  • Mediation 
  • Arbitration


2. A settlement agreement is regarded as a contract between Parties.

Generally, an out-of-court settlement is a compromise between the parties, and as such, it operates as a contract. A settlement agreement contract should contain the following:

  • The names of the parties
  • A whereas section that explains the reasons for the contract
  • A no admission of liability clause stating that the settlement does not include an admission of wrongdoing by either party
  • A promise to pay section stating the settlement amount that the defendant will pay the other
  • A payment schedule with details concerning the mode of payment 
  • A mutual release clause declaring that the parties shall not make claims against each other


3. Out-of-court settlements are treated confidentially

Unlike trial documents, public records that anyone can access at any time and out-of-court settlement files are treated confidentially, especially when the parties involved do not want their personal information to be open to the public.

4. Out-of-court settlement damages are taxable

Out-of-court settlement damages are considered income and, therefore, taxable. However, other types of damages are non-taxable, such as damages received on account of physical injuries and non-physical injuries.

5. Certainty of outcome

Usually, court trials have uncertain outcomes, as the judge's final decision cannot be accurately predicted. However, with an out-of-court settlement, the parties have more control over the process and the agreement's outcome, allowing them to settle the controversy with certainty. 

Filing a personal injury claim doesn't necessarily mean your case will get to court. Whether you're pursuing legal action in or out of court, having an experienced lawyer is always best. 

About the Author

Michael Redenburg

We Will Fight For You With Fifteen Years of legal experience, Attorney Michael J. Redenburg began his career defending cases for the clients of insurance companies. Initially defending no-fault claims at a Long Island based law firm, he then moved on to a Manhattan based firm where he defended t...


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