Settling out of court
Many claims for A court order for money to be paid to someone to compensate them for a loss suffered as a result of a civil wrong or breach of contract. For example, a person who caused a serious permanent injury to another person can be ordered by the court to pay damages that compensate the injured person for their loss of income from being unable to work. See also aggravated damages; compensatory damages; general damages; liquidated damages; nominal damages; special damages. arising from vehicle accidents never get to An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate.. Settling a claim before a complaint or A formal document issued by a court which says someone must appear in court on the date stated in the document. See also service; writ. is issued, or before a court The time and place at which a court or tribunal hears the parties argue their case and makes a decision., reduces legal The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs.. Also, court hearings are unpredictable and a case can be won or lost for many reasons. For example, the outcome of a case can be due to the Material presented to a court to prove or disprove a fact. It can include what witnesses say as well as documents and other objects. of independent witnesses, or the How believable a witness is in court when they claim to be telling the truth. See also independent witness; interested witness. of each of the parties.
If you are making a total loss claim and there is an insurance company on the other side, you may find that they The first step in agreeing to make a legally binding agreement. An offer must be accepted before there can be a legally enforceable contract. For example, a person can offer to sell their car for $5000 and a buyer can accept the offer and pay that purchase price. to pay you less than you are claiming. However, they A document that sets out what a person wants to happen to their money and other property after they die. sometimes pay more than stated in their first offer. You should be prepared to produce evidence of the condition and market value of your vehicle to support your claim (see ‘Damages’, below).
What to do if you receive a letter of demand
If a driver decides to To take legal action in a civil case. another driver for damages after a vehicle accident, the driver or vehicle owner or their insurance company will send a A letter, usually written by a lawyer for their client, or by a creditor, telling the person who receives it that unless they do what the letter says they will be sued. Often a letter of demand asks a debtor to repay a loan to avoid being sued, but the demand could be about any legal claim. to the other driver. This letter states that unless certain costs are paid, a complaint or summons to appear in court will be issued. Such letters should not be ignored.
If you receive a letter of demand, you can:
- deny Legal responsibility, enforced by civil or criminal courts. (perhaps indicating why a claim against you would fail); or
- threaten to counter-sue for your own damages; or
- question (without accepting any responsibility) the amount of damages claimed; or
- negotiate a settlement.
If you believe that the accident was not entirely your fault, a settlement proposal can be made by estimating what a court’s decision would be, and calculating a settlement offer accordingly. You should seek legal assistance to do this (see Chapter 2.4: Legal services that can help).
What to do if you cannot afford to pay
If you receive a letter of demand from another driver or from an insurance company, and you cannot afford to immediately pay all the costs outlined in the letter, you can offer to pay in instalments. The other driver or insurance company is not obliged to accept payment in instalments. An offer to pay in instalments, indicating what you can afford to pay, should be in writing. The offer should be accompanied by documentary evidence of your financial position (e.g. a copy of your Centrelink statement) and a statement that if the offer is refused, a copy of the letter will be produced in court when the question of costs arises. Sometimes people (particularly insurance companies) accept less than the full amount – provided it is paid immediately in cash – rather than waiting for the full amount to be paid in instalments.
If you are experiencing financial hardship and are having difficulty repaying an amount owed to an insurance company due to a vehicle accident, you may ask the insurance company to assess whether you are entitled to assistance. Under the General Insurance Guidelines setting out proper practice in an industry or occupation. For example, the franchising code of practice sets out rules for businesses operating under a franchise. Codes can be voluntary or statutory (required by legislation). (see Chapter 10.4: Insurance), the insurance company must supply you with an application form for financial hardship assistance and contact details for the national financial counselling hotline (tel: 1800 007 007). The insurance company may request reasonable evidence of your financial hardship, such as:
- Centrelink statements (if applicable);
- evidence of a serious illness that prevents you from earning an income;
- evidence of unemployment or disability, including mental illness.
The insurer can only request information from you that is reasonably necessary to assess your application.
If you request financial hardship assistance in relation to any amount sought from you, the insurance company is required to contact their Money that is owed by one person or business to another. collection A person who acts for someone else. They can make decisions, carry out tasks or make agreements for the other person. For example, if you ask someone to bid for you at an auction they will be acting as your agent. and put on hold any recovery action in relation to the amount you owe, until it has assessed your request and notified you of its decision.
If the insurance company decides that you are not entitled to financial hardship assistance, it must advise you of the reasons for its decision and provide information about its complaints process.
If the insurance company decides that you are entitled to financial hardship assistance, it must work with you to set-up an arrangement that could include:
- extending the due date for repayment;
- paying in instalments;
- paying a reduced lump-sum amount;
- postponing one or more instalment payments for an agreed period, or
a combination of the above options.
You may also ask for a A document signed by parties ending a court action. The party who began the action agrees to drop it, often in exchange for a payment by the other party. Also called terms of settlement., (1) To fulfil an obligation or be released from an obligation. For example, a debtor can discharge a debt by paying it; a prisoner can be discharged (released) from jail. or waiver of the debt or obligation; however, you are not automatically entitled to this.
If you are unable to reach an agreement, the insurance company is required to provide details of its complaints process.
If the insurance company decides that you are not entitled to financial hardship assistance and your circumstances change, you can make another request for assistance. While assessing your second request, it is at the insurance company’s Power to choose whether to do something or not. For example, a judge may have discretion to allow a party extra time to complete a document if it would be unfair to enforce the legal time limit. whether it again puts any debt recovery action on hold.
What is a release?
A release is a document signed by parties that ends legal action. The A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses. who began the legal action agrees to drop it, often in exchange for a payment by the other party. In a release, a party accepts an amount of money as full settlement of a matter and agrees that they cannot take any further legal action about the matter. When claims are settled out of court, it is normal for the insurance company or person who is paying the settlement to require the other party to sign a release.
You should be careful when signing a release for a claim for property damage. Make sure that the release does not prevent you from making a claim for personal injuries suffered in the accident. It is wise to only sign a release after any reference to a claim for personal injuries is deleted. To delete such text, cross it out and write your initials next to the crossed-out text.