What is the Difference Between a Settlement and a Lawsuit in a Personal Injury Claim?

The difference between a lawsuit and a settlement in New Mexico

In every personal injury claim, there is a critical decision of whether to settle the claim or file a lawsuit. Since this issue comes up in every case, I wanted to explain the difference. I’m going to break down the key differences that will help you make the right decision for you. 

Settlements: A Quick(er) Resolution

In a personal injury case, a settlement is an agreement between parties to resolve the matter outside of the courtroom. There is no lawsuit. Here's a closer look:

What is a Settlement?

A settlement involves the at-fault party or their insurance company offering compensation to resolve the case without going to court.

How Does a Settlement Work?

It's a negotiation process where both parties agree on a fair amount of compensation. This option is often quicker, less stressful, and provides a predictable outcome. You retain full control over how you want to resolve your claim. 


  • Fast Resolution: Settlements usually happen more quickly than lawsuits.
  • Stress Reduction: It avoids the formalities, stress, and costs associated with a lawsuit.
  • Predictable Outcome: You know in advance how much compensation you will receive. This eliminates the risk and unknowns of a trial. 


  • A settlement is a compromise so you might receive less than a judge or jury might award you. 

Lawsuit: Seeking Legal Recourse 

If a fair settlement cannot be reached, the alternative is filing a lawsuit and going through the legal system.

Here's What You Need to Know:

What is a Lawsuit?

A lawsuit involves taking legal action by filing a case (called a Complaint) in court to seek compensation for your injuries and damages.

How Does a Lawsuit Work?

If negotiations fail, the case moves to court, where a judge or jury decides on the compensation you are awarded. It's a formal legal process with defined steps.


  • Legal Protection: A lawsuit ensures your rights are protected through a formal legal process. It also helps resolve critical issues such as liability (who is at fault) that often prevent settlements. 
  • Allows for Discovery: The discovery phase of a trial entitles you to get important documents and information that is not available without a lawsuit. 
  • Higher Compensation: In some cases, a court may award more compensation than what was offered in a settlement.


  • Higher risk: You might get less or even nothing from a judge or jury. 
  • Takes longer: It is usually a long process—a year or longer. 
  • Costs: Court costs and other fees can add up. 
  • Personal toll: Litigation can be stressful and time-consuming. 

Choosing the Right Path Between a Settlement or a Lawsuit

Consider a Settlement if:

  • You prefer a quicker resolution.
  • The offered amount is fair and covers your damages.
  • You want to avoid the stress of a courtroom battle.

Consider a Lawsuit if:

  • The settlement offer is too low.
  • Liability (fault) is disputed, and you need a legal decision.
  • You are willing to take the risk to try to get more, knowing you could get less or even nothing.

In summary, whether you choose a settlement or a lawsuit depends on various factors. Understanding the differences between the two can empower you to make an informed decision that aligns with your goals and priorities. 

The great majority of cases are resolved through a settlement, and in my experience, this is always preferable when possible. 

Contact Our Experienced Roswell Personal Injury Attorney

Every personal injury case is unique, and it's crucial to consult with a personal injury lawyer to determine the best course of action for your specific situation. A lawyer can assess the details of your case, guide you through the process, and ensure your rights are protected every step of the way.

Our dedicated personal injury team here at The Injury and Disability Law Center is here to help you. Schedule your free initial consultation today by calling our office at 575-300-4000, starting a chat, or filling out our online form here

If you want even more information, feel free to download my free book, Car Accident Cases Made Simple(r), where I discuss this topic and more. 


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