Legal Settlement Glossary

Compensatory Damages

The umbrella term for economic + non-economic damages — the money meant to make the plaintiff whole. Compare with punitive damages, which punish rather than compensate.

Damages Cap

Also known as: Non-Economic Cap · Medical Malpractice Cap

A statutory maximum on what a jury can award. Most state caps apply only to non-economic damages (pain & suffering, loss of consortium) — economic damages (medical bills, lost wages) are usually uncapped. Texas has the strictest med-mal cap ($250K/$750K), California enacted phased AB 35 increases (2023→2033), and several states (e.g., FL, NY, GA) have NO med-mal caps because their supreme courts struck them down as unconstitutional.

Diminished Value

The drop in resale value of a vehicle that's been damaged and repaired, even after a perfect repair. Most reliably calculated using the 17c formula. Claimable in most states against the at-fault driver's insurance, but rarely against your own (with exceptions in GA, KY).

Economic Damages

Also known as: Special Damages · Specials

Quantifiable, receipt-backed losses: medical bills (past + future), lost wages, lost earning capacity, property damage, out-of-pocket costs. These are virtually always uncapped, regardless of state.

Loss of Consortium

Damages claimed by a spouse for the loss of companionship, affection, services, and intimacy caused by their partner's injury or death. Some states extend it to parent-child relationships. Often subject to per-claim or per-incident caps.

MICRA

Also known as: Medical Injury Compensation Reform Act

California's Medical Injury Compensation Reform Act of 1975 — the country's most famous med-mal damages cap. AB 35 (2022) substantially overhauled it: starting 2023, caps rose from $250K (frozen since 1975) on a phased schedule to $750K (non-death) and $1M (wrongful death) by 2033. 2026 figures: $470K non-death / $650K wrongful death. Economic damages are uncapped.

Multiplier Method

Insurance adjuster valuation: medical specials × a multiplier (1.5–5.0), plus lost wages. Soft tissue/whiplash = 1.5–2×. Surgical cases = 3–4×. Permanent injury/disability = 4–5×. Catastrophic = 5×+. The multiplier is negotiable — and is precisely what software like Colossus optimizes against the plaintiff.

Non-Economic Damages

Also known as: General Damages

Subjective harm without a receipt: pain & suffering, emotional distress, loss of consortium, disfigurement, loss of life's enjoyment. The category most often capped by state statute, especially in med-mal cases.

Pain and Suffering

Non-economic damages for the physical pain, emotional distress, mental anguish, and reduced quality of life caused by an injury. Two methods are standard: the multiplier method (1.5×–5× medical specials, depending on severity) and the per-diem method (a daily dollar amount × days of recovery). Insurance adjusters use software like Colossus and ClaimIQ to calculate these.

Per Diem Method

Alternative pain-and-suffering calc: a daily dollar amount (often the plaintiff's daily wage, $100–$500/day) × days of recovery. Used by some attorneys for short, well-documented recovery periods where the multiplier method understates suffering.

Punitive Damages

Also known as: Exemplary Damages

Extra damages awarded to punish particularly bad conduct (recklessness, fraud, malice). Distinct from compensatory damages. Most states cap them at a multiple of compensatory damages (often 3×) or a hard dollar figure. Rare in run-of-the-mill PI; common in product liability and bad-faith insurance cases.

Wrongful Death

A statutory claim brought by surviving family for a death caused by another's negligence or wrongful act. Damages typically include funeral costs, lost financial support, lost services, and loss of consortium. Some states (e.g., FL §768.21(8)) sharply limit who can recover — most notably barring adult children of decedents.

Comparative Negligence

Also known as: Pure Comparative · Modified Comparative

A rule that reduces your settlement by your percentage of fault. Pure comparative states (CA, NY, FL, MS, AK, AZ, KY, LA, MO, NM, RI, WA) let you recover even if you're 99% at fault — you get 1% of damages. Modified comparative states (most others) bar recovery if you're 50% or 51%+ at fault. Compare with Pure Contributory, the harshest rule.

Joint and Several Liability

Multiple defendants are each fully responsible for the entire judgment — plaintiff can collect 100% from any one. Some states have abolished it (replaced with proportionate liability based on each defendant's % fault); others retain it but only above a fault threshold (e.g., NY's CPLR §1601: full only above 50% fault for non-economic damages).

Negligence

The most common legal theory in PI: defendant owed a duty, breached the duty, and the breach caused your harm. Different from intentional torts (assault, battery) and strict liability (no fault required).

Premises Liability

Property owners' duty to maintain reasonably safe premises for visitors. The duty depends on the visitor's status: invitee (highest duty), licensee, trespasser (lowest, but special rules for children). Most slip-and-fall cases turn on premises liability.

Product Liability

Liability for harm caused by a defective product. Three theories: manufacturing defect, design defect, and failure-to-warn. Often strict liability — plaintiff doesn't have to show carelessness. Most mass-tort cases (talc, Roundup, hernia mesh) are product liability.

Pure Contributory Negligence

Also known as: Contributory Negligence · 1% Rule

The harshest fault rule in the U.S. — any fault on your part, even 1%, totally bars you from recovering anything. Used in only 5 jurisdictions: Alabama, Maryland, North Carolina, Virginia, and Washington D.C. If a Virginia jury finds you 1% responsible for a crash, you get $0 — no matter how badly the other driver behaved.

Strict Liability

Liability without fault. Applies to abnormally dangerous activities, product defects, and (in some states) dog bites. Plaintiff doesn't have to prove the defendant was careless — only that the harm happened and the defendant was the proximate cause.

Vicarious Liability

Liability for someone else's actions — usually an employer for an employee's negligence within the scope of employment (respondeat superior). Critical in commercial trucking, rideshare, and corporate-driver cases.

No-Fault Insurance

Also known as: PIP · Personal Injury Protection

In 12 states + DC, your own auto insurance pays your medical bills and lost wages regardless of who caused the crash — up to a limit. Florida, Michigan, New York and New Jersey are the most consequential no-fault states. You can only sue across the no-fault threshold (a dollar amount or a serious-injury definition).

Personal Injury Protection (PIP)

Also known as: No-Fault Coverage

Auto-insurance coverage that pays your medical bills, lost wages, and sometimes household replacement services regardless of fault — up to the PIP limit. The default in no-fault states; an optional add-on in others. New York's PIP minimum is $50K; Michigan offers tiered options up to unlimited PIP.

Subrogation

When your health insurer (or PIP carrier, or workers' comp) pays your medical bills, they can claim that payment back from any settlement you collect against the at-fault party. This is why your real settlement is often much less than the gross — the lien for paid bills comes off the top.

Total Loss

Also known as: Constructive Total Loss

When an insurer determines the cost to repair a vehicle exceeds a threshold (commonly 70–80% of pre-loss value, varying by state). Insurer pays the actual cash value (ACV) instead of repairing. Plaintiffs can challenge the ACV — many initial offers undervalue the vehicle.

Underinsured Motorist (UIM)

Coverage that pays you when the at-fault driver has insurance but not enough to cover your damages. Critical in states with low minimum liability limits (e.g., FL $10K, CA $15K). Buy at least UIM equal to your bodily-injury liability.

Uninsured Motorist (UM)

Coverage that pays when the at-fault driver has no insurance, can't be identified (hit-and-run), or the insurer is insolvent. Usually sold paired with UIM. Required in some states; optional in most.

Affidavit of Merit

Also known as: Certificate of Merit · Expert Affidavit

A pre-filing requirement (in most states) that an expert physician swear the case has merit before you can sue for med-mal. Failure to file the affidavit on time = dismissal. Texas (CPRC §74.351), Illinois (§5/2-622), NC (Rule 9(j)) and others have strict deadlines and very specific content rules — the most common reason valid med-mal cases die before reaching a jury.

Statute of Limitations

Also known as: SOL · Time Bar

The deadline to file a lawsuit. Miss it and your case is dead — no matter how strong. Personal injury SOL ranges from 1 year (LA, TN, KY) to 6 years (ME, ND). Med-mal cases often have shorter, stricter SOL (1–2 years from discovery) and a separate statute of repose that cuts you off even if you didn't discover the harm in time. Always file before the deadline; tolling rules (minors, fraud, fraudulent concealment) are narrow exceptions.

Statute of Repose

Also known as: Outer Limit · Repose Period

A hard outer deadline that runs from the act itself (e.g., the surgery), regardless of when you discovered the harm. For example, a 4-year statute of repose on med-mal means injuries discovered 5 years after the surgery are time-barred — period. Different from the SOL (which usually runs from discovery).

Contingency Fee

PI attorneys' standard fee model: no upfront fee, attorney takes a percentage (typically 33% pre-suit, 40% after suit filed) of the settlement, plus costs. If you lose, you owe no attorney fees. Some states cap contingency fees in med-mal (California Bus. & Prof. §6146 sliding scale).

Demand Letter

The plaintiff's written statement to the insurer of liability, damages, and a settlement demand. Usually attached: medical records, bills, lost-wage docs, photos. A strong demand letter (with specific damage calculations and case law) is the most important pre-suit document.

Letter of Protection

Also known as: LOP

A letter from your attorney to a medical provider agreeing to pay the bill out of any settlement, deferring payment until then. Lets uninsured plaintiffs get treatment without paying upfront — at the cost of a lien on the recovery.

Lien Resolution

Negotiating down what Medicare, Medicaid, ERISA plans, and providers must be repaid out of your settlement. A 20–60% reduction on a Medicare lien is common with proper challenge; ERISA liens are tougher. Often the difference between netting $50K and netting $20K.

Medical Lien

A claim by a healthcare provider, ERISA plan, Medicare, or Medicaid against your settlement to recover what they paid (or you owe) for treatment. Liens are negotiable — getting them reduced is one of the most consequential things your attorney does.

Settlement Release

Also known as: Liability Release

The signed document that exchanges the settlement payment for a discharge of all claims. Once signed, you can't sue for the same injury again — even if you discover the injury was worse than you thought. Read every word; never sign a release without an attorney reviewing it.

Structured Settlement

Settlement paid as scheduled annuity payments instead of a single lump sum. Common for minors, large catastrophic awards, and tax-disadvantaged claimants. Generally non-taxable for PI; cashing out (factoring) usually loses substantial value.

Arbitration

A private trial before an arbitrator (or panel). Can be binding or non-binding. Often required by insurance policies and consumer contracts. Generally faster and cheaper than court but with limited appeal rights.

Class Action

One plaintiff (or a few) sues on behalf of a defined class with common issues. Settlement is divided per a court-approved formula. Class members can opt out and bring individual cases. Distinct from mass torts where each plaintiff has an individual case.

Defendant

The party being sued. In PI, usually the at-fault driver, the property owner, the employer (rarely, due to workers' comp), the doctor, or the product manufacturer — and almost always their insurance company in practice.

Deposition

Sworn out-of-court testimony, recorded for use at trial. Both sides can question witnesses (and parties). The defense will depose the plaintiff at length — preparation with your attorney is critical.

Discovery

The pre-trial information-exchange phase: interrogatories, document requests, depositions, requests for admission. Where most cases are won or lost. Discovery typically takes 6–18 months.

Mass Tort

Many individual claims against the same defendant(s) over the same product or event (Roundup, talc, hernia mesh, Camp Lejeune). Different from class actions: each plaintiff has an individual case with its own valuation. Often consolidated into Multidistrict Litigation (MDL).

Mediation

A facilitated negotiation with a neutral mediator. Non-binding — either party can walk away. Most PI cases settle at mediation. Mandatory in some jurisdictions (FL, NJ, NY-some courts) before trial.

Multidistrict Litigation (MDL)

When many similar federal cases are consolidated before one judge for pretrial proceedings (discovery, motions). Plaintiffs keep their individual cases for trial, but most settle. The Judicial Panel on Multidistrict Litigation (JPML) consolidates MDLs. Examples: MDL 2641 (Bard IVC), MDL 2734 (talc), MDL 2741 (Roundup).

Plaintiff

The party who brings the lawsuit — the injured person in a PI case.

Tort

A civil wrong (other than breach of contract) for which the law provides a remedy. PI cases are torts. The Restatement (Second) of Torts and Restatement (Third) of Torts: Liability for Physical and Emotional Harm are the standard references.

Average Weekly Wage (AWW)

The wage figure used to calculate workers' comp benefits — usually 50–66% of AWW (state-dependent). Calculation usually uses the 52 weeks before injury, including overtime and tips. Critical to get right; the wage base affects every weekly benefit.

Exclusive Remedy

The workers' comp "grand bargain": employee gets no-fault benefits, employer gets immunity from tort lawsuits. Most third-party suits (against equipment manufacturers, sub-contractors, drivers) are still allowed — and often more valuable than the comp claim alone.

Maximum Medical Improvement (MMI)

The point at which a workers' comp claimant's condition has plateaued — further treatment isn't expected to improve the underlying condition. MMI triggers the transition from temporary to permanent disability and is when permanent impairment ratings are assigned.

Permanent Partial Disability (PPD)

A workers' comp claimant's permanent impairment that doesn't completely prevent them from working. Paid as a percentage of average weekly wage × a schedule of weeks (for scheduled losses) or by impairment rating × statutory factor (for non-scheduled).

Workers' Compensation

Also known as: Workers' Comp · WC

A no-fault state system that pays medical care and partial lost wages for workplace injuries — in exchange for barring the employee from suing the employer. Each state has its own benefit schedule, waiting period, and dispute process. Texas is the one state that lets employers opt out of the system entirely.