Can I Still File a Lawsuit After Accepting a Settlement?

File Lawsuit After Accepting Personal Injury Settlement

When you picture what a lawsuit looks like, you probably imagine a heated courtroom trial, with a jury foreman eventually standing up and reading a verdict, after which a judge hammers down the gavel. It’s the kind of thing we see on TV all the time.

Some civil lawsuits do look like that. But the majority of personal injury lawsuits are resolved through a private settlement agreement before there’s a chance for a trial.

For that matter, most personal injury lawsuits begin as a private insurance claim. Often, these claims get resolved through negotiations between your lawyer and the insurance company’s adjustor. In fact, there might never be a lawsuit at all.

But what if, after you sign a settlement agreement and accept some money from the insurance company in exchange, you then realize you got a lot less money than you should have?

That isn’t an uncommon scenario. Injuries aren’t always easy to forecast. Accident victims will sometimes think they’re on the road to recovery with all their costs covered… but then unexpected bills show up in the mail, or a wound stops healing, or you discover a hidden injury, or medical complications set in.

That’s why so many people end up asking, “Can I still file a lawsuit after accepting a settlement?”

If you’re currently on the fence about whether to settle with your insurance company, your goal is to understand the answer to that question before you settle.

You’re in the right place.

First, the General Rule: No, You Can’t Still File a Lawsuit After Accepting a Settlement

Unfortunately, it can be very difficult to take legal action on a claim after signing a settlement agreement. Often, that is exactly why the insurance company wants you to settle so soon after the injury… the faster they can “buy away” your right to take legal action, the sooner they can assure themselves they won’t lose a lot of money on the claim.

Settlement agreements typically require both parties to sign a mutual release agreement. Among other things, the mutual release will require you to promise that you’ll never make a legal claim against the insurance company relating to the same accident or injury — even if your injuries suddenly get worse.

Courts are generally willing to enforce settlement agreements, including mutual release provisions. In most cases, they are considered binding.

So is there any way that you can still file a lawsuit after accepting a settlement in California? Let’s take a look at the very narrow exceptions that exist.

Ways to Sue After Accepting a Settlement in California

Broadly speaking, there are a few scenarios in which an injured party can still file a lawsuit after accepting a settlement agreement from their insurance company:

The Settlement Agreement Doesn’t Include a Mutual Release Agreement

Ask an attorney to carefully review the language in your settlement agreement so that you fully understand its terms. If the settlement agreement does not include a mutual release provision, it may still be possible for you to file a lawsuit or pursue an additional claim.

Unfortunately, however, most settlement agreements do include a release agreement. Omission of a mutual release provision would be highly unusual, especially if one of the signing parties is an insurance company.

Challenges Based on the Terms of Settlement Agreement

If a settlement agreement is written in a way that is fundamentally unfair, overly vague, excessively broad, or unusually confusing, a court might be willing to strike down the entire agreement (or, alternatively, to invalidate the problematic provisions).

If the Other Party Has Violated the Settlement Agreement

Depending on the circumstances (and the language of the agreement), it might be possible to get out of a binding release provision if there is evidence that the other party is in material breach of the agreement.

Evidence of Fraud or Duress

Likewise, a court might be willing to invalidate a settlement agreement if there is evidence that the other party acted in bad faith. Examples of bad faith might include:

  • Fraud
  • Coercion
  • Blackmail
  • Duress
  • Threats
  • Violence
  • Withholding material facts
  • Entering into the agreement with the intent to violate it

As you might imagine, situations like these are uncommon, and proving this kind of bad faith after the fact can be a challenge. That said, if you do have evidence of bath faith, we encourage you to talk to an experienced lawyer as soon as possible.

Lawsuits Based on Separate Incidents

While a mutual release provision does usually prevent you from filing a lawsuit after accepting a settlement, it won’t keep you from suing the same party for an unrelated accident or injury.

So if you settle a car accident claim with Whoops Insurance Co. today and then get into another accident with the same Whoops-insured driver tomorrow, you can still file a lawsuit against either party.

Lawsuits Against Other Parties

Consider a hypothetical: Taylor, Katy, and Ariana get into a three-car collision. Taylor and Katy are each 50% at fault. Ariana sues Taylor and settles that lawsuit. Can Ariana still sue Katy? Yes! Generally speaking, a settlement agreement with one party won’t affect your rights against any of the other parties involved.

Did Your Previous Lawyer Give You Rotten Advice?

When people come to us asking, “Can I still file a lawsuit after accepting a settlement?” it’s often because they believe their previous attorney gave them bad legal advice. While you might have a malpractice claim against that lawyer (depending on the circumstances), bad legal advice by itself usually isn’t enough to get you out of a binding settlement agreement.

Bottom Line: Can I Still File a Lawsuit After Accepting a Settlement in California?

In certain rare circumstances, yes. But in most cases, no. This is why you must be very careful about entering into settlement agreements with insurance companies.

Insurance adjustors usually don’t make settlement offers unless they believe it’s in the insurer’s best interest to do so — especially if it’s still early in the claims process. In other words, the agreement is likely written to serve their interests, not yours.

You should never talk to an insurance company or sign any paperwork without first consulting an experienced lawyer. Remember:

  • You may be entitled to more compensation than you realize.
  • There may be important factors you haven’t considered.
  • The agreement, as written by the insurance company, might be unreasonable or unfair.

The Bakersfield personal injury attorneys at The Law Offices of Mickey Fine are here to help.

The Law Offices of Mickey Fine Will Fight to Protect Your Best Interests

Please don’t make the mistake of facing a powerful insurance corporation on your own. We invite you to contact our office and talk about your legal options. Our experienced Bakersfield personal injury attorneys are standing by.

The Law Offices of Mickey Fine will fight for a full and fair settlement of your claim. To learn more about your rights and options, contact our office and schedule a free, no-obligation consultation.

Time limits do apply to personal injury claims in California, so please don’t delay. Call 661-333-3333 in Bakersfield to speak with one of our Bakersfield personal injury attorneys today, or contact us online as soon as possible.

We will never charge a fee for our services unless we get you money first. The initial consultation is absolutely free.

Personal Injury
by Mickey Fine Law
Last updated on - Originally published on