“Full and Final Settlement” Means Both Full and Final in New Mexico Personal Injury Claims
Say you have been injured in an accident and have settled your claim with the insurance company.
Down the road you discover you either still need additional medical care for your injuries, or you discover new injuries you were not aware of at the time of the settlement. Can that settlement agreement be “re-opened” or can you file another lawsuit for additional damages?
The answer is likely an emphatic “No”. Prior to settlement, and most definitely prior to issuing you a check, the insurance company or opposing attorney will insist on a settlement agreement. This is typically, in the absence of an agreement to the contrary, an agreement in full and final settlement of claims. It is generally impossible to attempt to collect for additional damages after a settlement agreement has been signed.
The reason for this is that the defendant, usually an insurance company, agreed to settle your claim and make payment to you in exchange for a full release from all past, present and/or future claims stemming from the incident. The settlement agreement you signed most certainly included language similar to the following:
[Y]ou agree to waive your future right to make a claim or sue for any and all claims associated with the incident being settled. This includes claims unknown at the time of the signing, or for the worsening of, or for unknown future medical effect or injuries arising out of the claim or incident.
This binding effect of a settlement agreement is one of the reasons that it can take so long to settle a personal injury claim. Before entering into a settlement agreement it is absolutely essential to completely understand the extent of your injuries, including the need, if any, for future medical care. Any “future medical expenses” must be projected and figured into the settlement amount. This should be done by your treating physician and must include the following:
1. The likelihood that you will need future medical care.
2. A thorough description of the type and extent of the care you will need.
3. An estimate of the cost of the care taking into consideration how long you may need care and your life expectancy if it is believed you will need ongoing care for the remainder of your life.
It may not seem fair that you cannot make additional claims down the road for future medical care or injuries that were unknown at the time you signed the settlement agreement. However, if a settlement agreement could easily be undone by one of the parties months or even years down the road, then the parties could never feel that the claim is truly settled. The incentive for parties to enter into settlement agreements might disappear.
Furthermore, settlement agreements are an essential part of our legal process. Without settlement agreements our court system would be bogged down with all manner of trials, including personal injury lawsuits. For this reason the courts depend on settlement agreements to maintain the integrity and efficiency of the judicial system.
Binding settlement agreements provide benefits to all parties involved. Keep in mind that careful preparation of your case before entering into a settlement agreement, including thorough documentation of all past, present and future damages, is your best insurance against later ending up disappointed with your settlement. An experienced personal injury attorney will be able to walk you through this process to insure a fair settlement of your claims.
Related Reading:
Maximum Medical Improvement and Your New Mexico Personal Injury Settlement
Fair Settlement of Personal Injury Claims is More Math than Wrath!
Medicaid Liens: What is the Obligation in a Personal Injury Settlement?
