The Dangers of High-Volume Personal Injury “Settlement Mills”

Surely you’ve seen commercials on television for personal injury law firms that promise fantastic results and vigorous representation for all of your personal injury claims, ranging from workplace accidents to defective products to bad medicine. However, if you have a serious personal injury claim, you are better off seeking legal representation at a smaller personal injury firm that has the time and resources to properly handle your case. In her 2009 law review article Run-Of-The-Mill Justice in the Georgetown Journal of Legal Ethics, Nora Engstrom thoroughly examined the pitfalls of going to a “settlement mill” for a personal injury case. Today, settlement mills handle approximately 90% of personal injury cases nationwide.

Engstrom identified ten characteristics that settlement mills generally have in common. All ten characteristics sound more like a business than a law firm, which is undoubtedly problematic for clients. Some characteristics include ultra-high volume caseloads, aggressive advertising, entrepreneurial legal practices, a preference for settling cases, minimal attorney-client interaction, and quotas for attorneys.

According to Engstrom, the biggest flaw with these large volume law firms is their business model (never mind the fact that “business model” and “law firm” should never be used in the same sentence). The attorneys at settlement mills essentially have a quid pro quo relationship with insurance companies where they “trade” higher settlement amounts for low-value, unmeritorious claims (i.e., the vast majority of cases) in exchange for incredibly low settlements for high-value, meritorious claims. For instance, claims that most firms might not take because they are not worth it or not meritorious might get $1,000 settlements at a settlement mill. However, in exchange for these “favors” by the insurance companies, the attorney might settle a $500,000 or $1 million case for $50,000. The result? People who should receive substantial compensation for their legitimate injuries receive a minimal settlement.

When Engstrom interviewed former settlement mill attorneys, their responses were consistent with her findings regarding the business model. One attorney said, “We did nothing legal” and another said, “They do not want you to practice conventional law”. One attorney even said, “[for] most of the cases I handled, I didn’t even know the facts of the case”. Without any regard to the facts of the case, there is no way a client will be fully and fairly represented, as sometimes a single, seemingly insignificant fact, can really drive up the value of a case. When an attorney handles between 200 and 700 cases at any one time, each one with its own unique facts, representation is guaranteed to be inadequate.

Fairlie & Lippy is the opposite of a settlement mill; indeed, we are a boutique personal injury and criminal defense firm, and we will explore all the intricacies of your case and fight for your right to the best recovery we can obtain. Unlike settlement mills, we won’t settle for less.