If you're involved in a car accident, how much compensation you would get or you have to pay will be the biggest concern. So, the settlement between the at-fault driver and the victim is always about compensation. After confirming all the expenses and calculating all the damages and consolation money, they hold several meetings to decide the total amount of compensation. In Japan, more than 90% of car accident cases settle out of court. In this article, we take a closer look at how to have a settlement in traffic accident cases.
Settlement and Law
90% of automobile accident cases settle out of court. In a settlement between the victim and at-fault driver, they try to reach an agreement on the total amount of compensation. Settlement is a legal act. Once both parties agree in a settlement, the at-fault party has a legal obligation to pay compensation by a certain due date. At the same time, a victim gets a legal right of receiving it. Settlement is valid on a verbal promise, but usually, a victim or at-fault party makes an out-of-court settlement document for the record. Both parties will be legally bound to the document.
When to start a settlement
Start out-of-court settlement only after you can sum up all the costs you have paid. Once a victim and an at-fault driver agree in the out-of-court settlement, a victim cannot claim any more additional cost which might occur in the future. With this in your mind, start out-of-court settlement only after you confirm any other additional cost won't occur. The best timing for the settlement depends on the cases. In the table below, you can see the most common timing, depending on the cases.
| Case | When to have settlement | |
| 1 | The victim was dead | After a funeral |
| 2 | The victim was injured but not left with residual disability | After the injury completely recovered |
| 3 | The victim was injured and left with residual disability | After GIROJ designates the grade for your residual disability |
Who will negotiate?
A victim and at-fault party are supposed to negotiate for reaching an agreement in an out-of-court settlement. However, in practice, a victim will negotiate with a voluntary insurance company from which an at-fault party buys insurance. More than 70% of drivers buy voluntary insurance in addition to CALI (Compulsory Automobile Liability Insurance), and such voluntary insurance usually offers out-of-court settlement representation service. So, in most cases, a victim has to negotiate with a professional adjuster having legal knowledge and experience in car accident cases.
Cautions when having a settlement
The victim and at-fault driver start communication well before the settlement. For example, when the victim starts treating an injury, the insurance company from the at-fault driver side might offer to pay medical expenses. However, note that their initial offer is not legally bound. Sometimes they change their offer in the settlement. For example, let's think about the case when an insurance company initially offered the full payment for your medical expenses, and they already paid it in advance of the settlement. They sometimes change their offer in the settlement. They might change the offer from full payment to only a 70% payment. So, in this case, the cost they already boar will be allocated to other cost items like compensation for property damages. So it's important to note that their initial offer might change in the settlement.
Once you settle the case, you can't claim additional payment anymore. So, take care not to have a settlement meeting in the middle of your treatment process.
How to proceed with a settlement
Make a settlement document
Although the verbal settlement is legally effective, settle your claim based on a written document so that you can get compensation for sure. In the document, clarify the following:
- Name of the victim and at-fault party
- Information about the traffic accident (date and time, place, car number, and how it happened)
- The amount of compensation
- Payment condition
Note that the amount of compensation should be based on detailed calculation. See this article: https://auto-insurance.jp/compensation/calculate-compensation/
See people from the at-fault driver's side
You will have a meeting with some of them several times. Stay calm and take notes about what you discuss as detailed as possible. Use a voice recorder if possible. If their offer is not agreeable, don't easily say yes to them. A settlement meeting is sometimes held more than 10 times until both parties can finally agree. So, if you can't say yes, just go back home. You can check past precedents and do the calculation again. If you cannot be satisfied with the at-fault driver's offer, consulting with professionals is an option. They have experienced lots of cases. You can ask them the adequate amount of compensation, whether you should go to court, or tips for settling the case out of court.