You would think if you are badly hurt in a car accident, it would make sense for you to pursue a BIG judgment against the driver who hit you, right? Not necessarily…
A recent dialogue with a client got me thinking about how backwards it may seem to folks when I tell them that I cannot recommend taking their case to trial because they may be better off taking the insurance money – even if that insurance money clearly is not sufficient to fully compensate them for their injuries.
Heck, if the insurance money isn’t enough, why wouldn’t you want to get a judgment against the bad guy and then collect the money directly from the bad guy?
The short answer is that sometimes judgments aren’t worth the paper they are written on. You have heard the expression “You can’t get blood from a stone?” Likewise, you can’t collect on a judgment unless the person against whom you have the judgment has some money or other assets subject to collection. The plain hard truth is that most often when a person does not have good insurance coverage, they also don’t have any real $ to collect against.
- First, collection may be difficult/impossible because of the lack of assets. You may think, why not get a judgment anyways? What if the person who didn’t have the assets to settle a judgment suddenly hit the lottery or came in to a lot of money? Well, first we would have to know about his windfall – and he’s not going to make that easy. Then he’d have to be dumb enough to put it in a bank where we could reach the money – THEN we might be able to collect on the judgment.
However, collecting on a judgment is very tough and there are plenty of ways for a debtor to hide or shelter money from collection. In fact, I have a judgment for $400,000 I obtained 8 years ago and I have spent close to $30,000 on collection lawyers and we have yet to receive a single penny. For all of these reasons, pursuing a judgment doesn’t turn out to be the solution one would think…
- Second – and this is related to the first point – we don’t get a penny of the money from the car insurance carrier unless we sign a Release releasing the driver from any personal liability. In other words, we are over a barrel – if we want the insurance $, we have to let the driver go. I know the insurance payment is only $25,000, but $25,000 is better than a possible zero.
Now, don’t get me wrong – the insurance will pay $25,000 toward the judgment, but that is all they would be required to pay. So that leads us to the third point…
- Third, it costs money to pursue a judgment because to do so we have to go to trial and the average cost of a trial like this would be approximately $8,000-$10,000. This is just for costs (i.e. doctor’s testimony, court costs, transcription fees, etc.) and doesn’t include a penny of my fee. I hate the idea of eating up that much in costs when the maximum insurance coverage is only $25,000.
For all these reasons, I think pursuing a judgment is not always a good idea. Ultimately, however, it is the client’s decision and I will pursue whatever course he prefers. I just help him make an informed decision.
I hope this clarifies this issue for my blog readers. Please, if you have questions about this topic, don’t hesitate to call or e-mail me for more information.
James B. Reed
NY & PA Injury & Malpractice Lawyer
Ziff Law Firm, LLP
Toll-Free: 800-ZIFFLAW (943-3529)
Blogs: NYInjuryLawBlog.com and