Claim vs. Lawsuit: What’s the Difference?
Table of Contents
Defining a Claim
A claim is a request for damages from an at-fault party for causing injuries and damages to another. Its meaning differs depending on whether the person making a claim is in litigation or not.
If you are injured and someone else is at fault, you may ask that person for damages. This is a claim. There is no lawsuit at the time.
You may make a claim informally with the person who caused your injuries. Or, more likely, you will make a claim with their car, property, or other relevant insurance coverage to request damages.
For example, assume your next-door neighbor Tom calls you to see if you can come over and help him move a picnic table off his deck. You go over, and he’s waiting on the deck, which he just power washed. You each lift an end of the picnic table and carry it off the deck down some stairs. You slip on the slippery stairs, drop the picnic table, and it lands on your ankle and breaks it.
You ask Tom for reimbursement of the medical expenses of treating your broken ankle. A pre-litigation claim involves you, Tom, and Tom’s property insurance company working out an arrangement to pay for your medical expenses. There’s no lawsuit, and likely none in sight as you all work out the deal.
Claim in a Lawsuit
Most of the time, a personal injury claim like your broken ankle can be resolved without going to court. But assume Tom and his insurance company don’t want to pay you a fair settlement amount. Then you may have to consider suing Tom and the insurance company.
In this case, when you file a lawsuit, it contains a personal injury claim, which provides the court two pieces of information: (1) a short and plain statement showing you are entitled to relief; and (2) a demand for the type of damages sought (usually monetary).
Defining a Lawsuit
On the other hand, a lawsuit is a legal vehicle in which your claim or claims are heard and decided.
It consists of the following steps:
- Complaint. The plaintiff’s lawyer files this legal document. It alleges what the at-fault person (the defendant) did wrong, how the plaintiff was injured, and the damages suffered.
- Answer. The defendant files an answer to the complaint.
- Discovery. To effectively litigate a claim, the parties usually need more information. The gathering of this information is called discovery. Common forms of discovery are interrogatories (written questions), requests for production (of documents or other things), and depositions (each party is questioned under oath by opposing counsel).
- Dispute resolution. Public policy favors resolving differences without the cost and time associated with litigating the claim in a lawsuit. Therefore, the parties are encouraged to resolve their differences prior to trial. This works in two ways. First, the parties usually informally discuss settlement at various times. Second, they are required to engage in formal mediation in good faith. If a settlement is still not possible after these multiple attempts, the court has to accept that trial is inevitable.
- Trial. This consists of the following steps: jury selection, opening statements, presentation of witness testimony and exhibits, and closing arguments. Then the judge provides the jury with instructions about the law, and the jury deliberates on your claim. When they come to an agreement, the foreperson of the jury announces the jury’s verdict. This can take a few hours to several days.
Pros and Cons of Claims vs. Lawsuits
Resolving a claim without court involvement has many advantages. First, you save money in court costs and attorney fees. Second, you’ll probably get money faster.
There are also disadvantages, though. These include having to deal with an insurance company that does not have your best interests in mind. The company also decides how much compensation they will provide and usually tries to minimize the amount they pay you.
There are also benefits to initiating a lawsuit by filing a claim. The biggest one is that a neutral and objective court will hear it. You may also receive more compensation because a jury is deciding it, not the defendant’s insurance company. Finally, in some cases, punitive damages may be awarded if the defendant’s conduct was particularly egregious.
There are disadvantages as well. Primarily, it’s the length of the litigation process. It can take up to several years to fully litigate your claim, get a jury verdict, and receive the payment from the defendant’s insurance company.
Don’t Go it Alone
Whether it’s a pre-litigation claim or a claim in a lawsuit, the goal is the same – getting compensated for your injury. It doesn’t matter whether you wish to deal directly with the defendant’s insurance company by filing a claim with them or filing a lawsuit against them. In either case, our experienced attorneys are here to work with you every step of the way.