How to Negotiate From Knowledge

My grandmother’s recent experience after a minor automobile accident can teach a useful lesson about one aspect of the legal process: the art of negotiation.

While walking in a shopping center parking lot a few months ago, my grandmother was struck by a slow-moving vehicle. The driver simply didn’t notice her. Luckily, she was not seriously injured. But she was shaken up and is still a little nervous about walking near that particular shopping center.

She did not require much in the way of medical treatment, although she did visit her doctor a few times to make sure she was all right (a prudent thing for an 87-year-old woman).

When she fell, a dental bridge in her mouth was chipped. It would cost $850 to replace.

So what sort of personal-injury lawsuit do we have here? Not much. No significant physical injuries, but some obvious pain and suffering, and a sympathetic plaintiff who was not at fault.

I suppose an aggressive lawyer could make a federal case out of this and try to squeeze the automobile insurance carrier. But then the lawyer would want his percentage contingency fee, from 30% to 40%, for his troubles.

So what was my advice?

Not to file a lawsuit. In fact, I just wanted her to forget about the accident and not worry about it anymore. I wanted to keep her blood pressure down.

If she sued, there would be depositions, re-creations of the accident, measuring skid marks, and experts testifying about the distance between her and the car, not to mention a long drive to the courthouse.

But she did want to collect something from the insurance company, and the claims adjuster seemed willing to make an offer.

I told her to listen to the offer and not to state at first what she hoped to collect. After all, if my grandmother revealed a proposed settlement much lower than what the company was willing to pay, she’d never find out what they thought the case was worth. It’s better to negotiate from a position of knowledge, and it’s easier to move the other side if they don’t know what you really want.

Most important, I told her not to accept the first offer, no matter how generous it sounded. The other side usually has some flexibility in these matters. Overall, that’s pretty fair advice for anyone in that situation.

The first offer was for $1,000. That was more than she expected to receive, but she rejected it. The claims adjuster then jumped up to $2,000. Still, my grandmother stood firm and said it was not enough.

They finally settled at $2,250.

And she didn’t even go to law school.