Claim vs. Lawsuit

The terms claim and laws are similar, but they are not interchangeable. A claim and a lawsuit are two distinct actions injured individuals take to recover compensation for damages. The primary difference is that a claim is handled between the parties, whereas a lawsuit is a civil action filed with a court.

What is a Claim?

Personal injury claims arise from tort law. A tort is an act or omission that results in harm or injury to another person. It amounts to a civil wrong that results in financial liability for damages. Filing a claim is asserting your right to recover compensation for the harm and damages caused by the other party.

For example, you slip and fall while shopping for groceries. As a result, you break your leg and injure your back. The reason for your fall was damaged flooring that caused an uneven surface.

You file a claim with the store seeking reimbursement for medical costs, lost wages, and other damages. The store negotiates a settlement with you to reimburse you for your losses, pain, and suffering.

Filing Claims with Insurance Companies

The term claim can also refer to insurance claims. For example, many personal injury cases are handled by the at-fault party’s insurance company.

Let’s assume you sustain serious injuries in a car accident. The injuries exceed your no-fault insurance and qualify for a claim against the at-fault driver.

You file a claim with the other driver’s liability car insurance provider. The car insurance company assigns an insurance adjuster to investigate your claim. The insurance company and your personal injury lawyer negotiate a settlement for the claim.

You are compensated for your injury and receive money for your:

• Medical bills
• Lost wages and benefits
• Physical pain and suffering
• Permanent impairment or disability
• Reduced future earning potential
• Mental anguish and emotional distress
• Loss of enjoyment of life and quality of life

However, let’s assume the insurance company disputes liability for the cause of the action. It claims that you were at fault or partially at fault for the cause of the crash.

In that case, your personal injury attorneys may advise you that filing a personal injury lawsuit is necessary to protect your right to fair compensation.

What is a Personal Injury Lawsuit?

A lawsuit is a legal action filed with a court regarding a disputed matter. When you file a lawsuit, you allege specific facts that result in a cause of action against another party. A lawsuit generally contains:

• A summary of the facts of the cases
• The allegations of wrongdoing by the other party
• A discussion of the law holding the party financially liable for damages
• A description of your injuries and damages
• A demand for monetary compensation for your damages

When you file a lawsuit, you must serve a copy of the lawsuit to the defendant (the party who caused your injury). The defendant has the right to file an answer responding to your allegations. In most cases, the insurance company for the at-fault party hires a lawyer to defend the lawsuit.

The litigation process includes several phases. After the initial pleadings are filed and served on the parties, the parties engage in discovery. Discovery is the process of obtaining relevant information from the other party.

Examples of discovery include, but are not limited to:

• Interrogatories (written questions answered under oath)
• Depositions (sworn testimony outside of court)
• Requests for production of documents
• Requests for admissions (responses under oath admitting or denying specific facts or statements)
• Subpoenas (court orders requiring parties to appear for testimony or to produce documents)

After the parties complete discovery, they may enter settlement negotiations or mediation. Many lawsuits are settled before trial through voluntary settlements or court-mandated alternative dispute resolution.

If the parties do not agree to a settlement, the case proceeds to trial. Each party presents their case to the jury. The jury deliberates and returns a verdict. Either party may appeal the verdict if they disagree with the jury’s decision.

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Pros and Cons of Claims vs. Lawsuits

Filing a lawsuit can be costly and time-consuming. It is generally less expensive and quicker to settle a claim without filing a legal action. However, the judicial process is available when the parties cannot resolve their dispute.

There are deadlines for filing lawsuits related to personal injury claims called statutes of limitations. The statute of limitations for most personal injury claims in New York is three years from the date of injury. However, there are exceptions.

For example, the deadline for filing lawsuits related to medical malpractice is generally two years and six months from the date of the malpractice or the end of continuous medical treatment by the at-fault medical provider. However, if the case involves wrongful death, the deadline for filing a lawsuit is two years from the date of death.

There are also exceptions related to injuries to children and actions against government entities. It is best to seek legal counsel as soon as possible after an injury to avoid losing your right to file a claim against the party who caused your injury.