Settlement Negotiations Flashcards
6 cards from real accident attorney practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Settlement Negotiations flashcards as text
What is BATNA and how does it affect accident settlement negotiations?
Answer: Best Alternative To a Negotiated Agreement: knowing the trial outcome if no settlement is reached strengthens or weakens negotiating position
BATNA analysis helps attorneys advise clients by comparing the expected trial outcome to the settlement offer to determine whether to accept or litigate.
What is the attorney's ethical obligation when presenting a settlement offer to their client?
Answer: To promptly communicate every settlement offer and provide objective advice, leaving the final decision to the client
Professional conduct rules require attorneys to promptly convey all offers to clients and give honest advice, but the client ultimately decides whether to accept or reject.
What is a Medicare Set-Aside (MSA) and when is it required in accident settlements?
Answer: A fund protecting Medicare's future interests by reserving settlement funds for injury-related medical expenses Medicare would otherwise cover
MSAs are often required in settlements involving Medicare beneficiaries to ensure Medicare is not billed for accident-related care already covered by the settlement.
What does it mean to tender policy limits during settlement negotiations?
Answer: The insurance company offers to pay its full policy limit to settle the claim
Tendering policy limits is a strategic move by the insurer to cap its exposure by offering all available coverage, sometimes protecting the insured from a personal excess judgment.
What is the significance of the made-whole doctrine in accident settlements?
Answer: An insurer with a subrogation right cannot recover from the plaintiff's settlement until the plaintiff has been fully compensated for all their losses
The made-whole doctrine protects plaintiffs by requiring that their insurer's subrogation claim is subordinate to the plaintiff's full recovery.
What is an advance payment agreement in accident settlement practice?
Answer: An agreement where the defendant or insurer pays a portion of the expected settlement amount before the case is fully resolved
An advance payment agreement allows insurers to provide partial compensation early, helping the injured party cover immediate medical bills without waiving their right to a full settlement.