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In Good Form

Damages and Settlement

By Leonard Bucklin

November/December 2008 Table of Contents


All of the highlighted forms discussed in this article and listed below are available for instant download. Click the form name to obtain an easily modifiable Microsoft Word version of every document.


When the judge asks, “What are your damages?” When the jury needs to know, “What is the rational way of adding up the economic damages from loss of the contract to sell 1,000 widgets?” When the mediator asks, “What are your out-of-pocket costs?” When your defendant’s insurer questions, “What are the plaintiff’s out-of-pocket expenses?”; “How long was the plaintiff in the hospital?”; and “What are the injuries that were diagnosed?” These are the times your team must be able to respond with a short, direct, categorized and dollar-specific list.

Use the Personal Injury Special Damages List [§13.4] to summarize damages in a personal injury case. Begin completing the form as soon as the case starts. It will help your attorney determine:

  • How much the case is worth, and the amount of resources that the legal team can afford to spend on the case.

  • Whether there are holes in what should be known about damages. You can help your attorney by working on filling in the gaps.

Medical Bills

In the typical bodily injury case, the defense puts in a general denial of everything your side pleaded. That means that at trial, your attorney will have to prove the medical treatment was reasonable, that it was caused by the accident and that the charges were reasonable. Don’t let your attorney be caught flat-footed at trial by an objection to introduction of the medical bills on the grounds that they have not had the necessary foundation of testimony on what was reasonably necessary for medical treatment.

As soon as the defense gives your team a general denial answer, including a denial of your team’s pleading of medical expenses, do two things:

  1. Immediately send the defense a nice letter enclosing a medical authorization from your client for him or her to inspect medical records. Opposing counsel will get it sooner or later, so give it to him or her right away to justify the next step.

  2. Sixty days later, send out Plaintiff’s Request for Admissions Re Medical Expenses [§13.2].


When preparing your trial notebook, it’s important to place this Request for Admissions Re Medical Expenses behind a “Damages List” tab so that you will handle it during the first 90 days of the litigation. That is a crucial time period for your team to establish that it will take no nonsense from the defense.

The Request for Admissions Re Medical Expenses mentions at length the consequences of failure to admit, including that a denial will question the professional conduct of the medical provider. First, this will make the defense attorney seriously think about his or her game of denying everything your side pleaded. Second, if the defense attorney does deny the requests, your treating doctors will become wonderfully cooperative after you tell them that the nasty guy on the other side is questioning their medical ethics. Suddenly doctors who would not talk to you about the case are willing to appear at trial and say how badly your client was hurt, and why their patient had to endure both the pain and the expense of treatment.

If the defense admits the items, make a large posterboard of the admissions, signed by the defense attorney. Do as we do in Plaintiff’s Request for Admissions Re Medical Expenses — make the actual place for the defense attorney to sign a separate page so it’s easy to copy and enlarge separately. Offer the enlarged version of the admission in evidence in chambers before the opening statement. Then show the enlarged admission to the jury at the beginning of the case to establish that the opposition has no defense to the damages your team will be seeking at the close of the case.


Breathes there a case with soul so dead that settlement isn’t discussed sometime during a deposition or trial? The forms in this settlement section will be your team’s portable memory of important facts bearing on negotiations and settlement; your team’s chart on where negotiations are going; and for the plaintiff’s counsel, a record of the client’s direction to settle.

The first item of business is a warning to your team regarding disbursing settlement proceeds. When a plaintiff gets money from a tort suit through a judgment or settlement, the plaintiff’s creditors can assert claims against those proceeds. Watch out! Your legal team (whether plaintiff or defendant) might have a duty of notification, payment and accounting to those creditors. The risks of liens are not just for the plaintiffs and their legal teams anymore. Defense counsel, defense insurers and the defendant personally might have risks if the settlement doesn’t adequately address liens.

Most trial attorneys vaguely are aware that subrogation rights might exist and that statutory or contract lien rights also might exist. However, most attorneys are not aware of the strength of those creditors’ rights against the attorney who disburses the lawsuit proceeds to the plaintiff without proper notification, payment or accounting to the creditors. This isn’t the place for a textbook of information on the particular liens in your state, but it’s the time to impress upon you the need to fill in the provided forms — especially the blanks that ask you to list the insurers and lienholders that you know exist.

In personal injury lawsuits, medical providers, subrogated insurers, government entities and others can and do assert lien rights against the settlement funds. As a consequence, liens have a significant impact on the way settlements are negotiated, the amount offered by defense insurers, the ways in which settlement releases are drafted and the possibility of legal malpractice.

Help your attorney avoid disappointed clients. It’s important for your legal team to either make an agreement with a subrogated insurer or discuss with the client the possible claim by an insurer to a portion of the recovery before the settlement is agreed upon. Otherwise, your team’s clients might be disappointed when required to give money to their own insurer for the insurer’s rights of subrogation, netting less money than they had expected to receive. (For more information on finding and handling subrogation liens, see “Working With Subrogation Liens” on Pages 80 to 81.)

The following three settlement forms are available at www.legalassis tanttoday.com.

These forms ask you to fill in names and numbers regarding insurance policies, liens, subrogation interests and letters of protection designed to help prevent a claim against your attorney for improper settlement or disbursal of funds.

  • Settlement Offers Record [§22.4]. This form records offers and demands, and other data useful in settlement negotiations.

  • Negotiation Preparation Worksheet [§22.5]. Completion of this form is the key to being ready to negotiate effectively. By working through this form, your team will be on a good course for settlement.

  • Settlement Conference Computations [§22.6]. Notice that this form accomplishes the tasks of telling the client what the net result of a settlement would be, and then getting the client to sign an acknowledgment that it’s the client’s judgment that has directed the attorney to settle (and not the other way around).


Failing to document your legal team’s settlement discussions with clients can come back to haunt your attorney. I serve as an expert in legal malpractice cases and periodically encounter this situation. The plaintiff testifies that he or she was told by the lawyer, “You have to settle, so sign this.” The lawyer defendant in the malpractice claim testifies, “I never said that. I only told the client the reasons for and against settlement. He directed me to settle and I had to do what the client directed me to do.”

Attorneys need to be careful not to exert too much pressure on a client to settle or to go to trial. There is a thin line between giving clients realistic advice about their case and pressuring them to settle. Certainly, if your attorney goes so far as to threaten to withdraw, your clients realistically can contend that they were extorted into settling. The Settlement Conference Computations form, which gives the plaintiff an estimate of the client’s net on a settlement, has a place for the client to sign and agree that the settlement is directed by the client after receiving information from the attorney. Notice how the form ends with:

11. Which leaves Check for Client of about: $________.

Client Direction to Attorney: I have received all the information I have requested from my attorneys. I have exercised my independent judgment on whether to settle my case. I believe I should settle for the gross settlement amount now offered by the defendant. I authorize and direct my attorney to accept the defendant’s offer.

If your team is in trial when a settlement is reached, ask the court for permission to appear with the adverse counsel and your team’s clients in chambers and have the settlement agreed to on the record by the clients. Be sure your attorney asks the clients on the record if they understand that the final decision to settle is theirs; they believe they have all the information they need to make a decision; and they believe the settlement is reasonable under all the circumstances of the case. If this is a case regarding a minor, ask the court to approve the settlement as fair and reasonable on behalf of the minor.

Plaintiff Attorney’s Closing Letter

Abraham Lincoln has been quoted as saying: “The purpose of an engagement letter is so the client knows he has a lawyer, and the lawyer knows he has a client.” The purpose of a closing letter is somewhat the same: so that both parties know when the lawyer-client relationship ends. A closing letter must make it clear that the lawyer is telling the client that the lawyer’s representation is over. Without a clear termination date, a court could find that the client reasonably believed there still was a lawyer-client relationship, and therefore one continued to exist. A court might find a continuing duty to the client that required more action by the attorney, or a court also might find that the statute of limitations had not begun to run because the relationship never officially was severed by either party.

Because of the foregoing reasons, after a litigated case has ended, both the plaintiff and the defense attorney should send a closing letter. However, the plaintiff’s attorney who succeeds in making a recovery for the client has an additional special reason for delivering a closing letter: There is a need to make and memorialize a final financial accounting with the client. The need arises out of the usual course of plaintiff litigation. At the start, the fee arrangement retaining the attorney at the beginning of the case doesn’t specify the future liens, which by a statute or agreement arising throughout the litigation must be deducted from the gross settlement amount. Nor does a plaintiff’s attorney usually generate a bill for the costs of litigation, or other matters for which the attorney is to be paid, until the end of the litigation.

If there isn’t a specific and written accounting given to the plaintiff at the end of plaintiff litigation, the plaintiff’s attorney is heading for future trouble. All too often, clients who don’t sign a receipt for a final accounting come back two years later and say they don’t know why the settlement checks they received were less than the settlement amounts they remember agreeing to in the mediation. In such situations, you need to be able to pull out a comprehensive receipt that the client signed. So, in short, plaintiff attorneys need a closing letter to end the relationship and memorialize the final accounting.

The law in most states requires that, unless your client consents otherwise, an attorney recovering money must hand the entire amount collected over to the client, and then ask the client to pay the contingent fee and other agreed costs of the litigation. In prudence, a plaintiff’s attorney needs something signed by the client agreeing to the fee, costs deductions and payments of liens before sending the net amount to the client.

The form Plaintiff Attorney’s Closing Letter on Successful Settlement [§22.8] is helpful because it specifies when “our relationship as your attorney will end.” In addition, the form has a numbered list of items that accomplishes the final accounting.

Item No. 1: Items that must be paid. This part of the letter is the place to list any liens, subrogation rights or contractual agreements, which, by law or contract, must be paid. (If your lawyer pays the client funds on which there is a lien, he or she might be liable to pay the lienor.) This is the place to list not only the amounts of any workers’ compensation liens, but also amounts due to insurers under subrogation causes, or amounts due to Medicaid or other governmental programs.

Item No. 2: Attorneys’ fees. The amount of attorneys’ fees always should be specified at this time. Furthermore, if your attorney is associated with another law firm that has forwarded the case to your team for handling, the final attorneys’ fee split should be specified. Many states now require that fee splitting be disclosed to the client at the beginning of the attorney-client relationship. If the fee-split percentage was disclosed previously, a reference back to the previous disclosure will be sufficient. However, if the client never has been advised as to how the fees would be split, the fee split between the two firms should be specified fully at this point. (Because this form letter also goes to associate counsel, the form has the additional advantage of memorializing the fee-split amount to him or her.)

Item No. 3: Known costs. The firm’s total investigation and litigation costs are not known until the end of the case, and frequently they are not completely known at the time of a settlement. But costs now known should be stated, and a full listing should be given to the client so the claim can’t be made two years later that the client had amounts deducted without knowing what was being paid by the deductions.

Item No. 4: Medical expenses. The medical expenses that are outstanding should be shown at this point by a separate list of the expenses. Notice that there are three special medical checklist categories to which your team should make reference, to wit: the medical liens already in existence; the letters of protection your attorney or the client have signed with medical providers; and the medical bills, even though they are not yet perfected into medical liens. Give the client a list and then your attorney will not be on the hook for having used settlement money to pay the medical provider. Your attorney wants the medical bills paid not only because it’s ethically right to pay the medical bills but also to maintain the relationship with the medical community for the future. In most states, medical bills either are automatic liens or can become liens overnight, and the law requires attorneys to protect lienholders, even if doing so is contrary to what the client would like to do.

Item No. 5: Additional expenses. This is in the form because in some states (but not all), it’s ethically permissible for a law firm to advance living expenses or other expenses to a client who, because of economic circumstances, would otherwise have to accept an obviously inadequate settlement. Alternatively, if a defendant has offered a clearly inadequate sum in the hopes that starvation will prevail over good sense, your law firm (where ethically permissible) might have guaranteed a bank loan to your client. Your firm wants the loan paid to erase its contingent liability as a guarantor. If your state allows advances to clients, and advances or loan guarantees have been made, Item No. 5 in the list should be stated and the amount approved by the client’s signature on the document.

You should have language in the closing letter indicating that the client now understands everything to his or her satisfaction. If the client acknowledges understanding and satisfaction with the amounts, you will eliminate most future questions regarding the difference between the client’s gross recovery and the net recovery.

Clients usually want money as soon as possible. This has to be balanced against the fact that some costs and bills trickle in, and you would like to hold back some reserve money from the client to pay those bills — you need the client’s permission to do that. I suggest, therefore, a reserve account amount, and an agreement by the client to the specific amount held back and the date of distribution of the reserved amount, which this letter includes.

The form also assumes that the case was forwarded by another attorney who shares in the fee. Those references to a forwarding attorney or fee splits should be eliminated if this isn’t your situation. If there is no forwarding attorney, the name in the receipt form should be changed to whoever in your office will handle the explanation as the letter is hand-delivered to the client. This closing letter always should be hand-­delivered and the receipt signed by the client at that time.

If there is a forwarding attorney, it’s good public relations to send him or her the original closing letter. Ask the forwarding attorney to deliver and explain the letter to the client, and then return a signed copy for the file. This will make the forwarding attorney a friend in the future.



Leonard Bucklin has been elected a fellow of the International Academy of Trial Lawyers, which attempts to identify the top 500 trial lawyers in the United States, and is a member of the Million Dollar Advocate’s Forum. He is the author of “Building Trial Notebooks” (www.jamespublishing.com or (800) 440-4780), from which this article is excerpted.


Visit the Forms Directory page for links to the forms discussed in this article, as well as over 100 forms relating to a variety of other topics.



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