| Read Time: 5 minutes | Medical Malpractice
medical malpractice settle out of court

If you or a loved one has been injured by the negligent behavior of a healthcare provider, you may be eligible to file a claim for medical malpractice. Many injured patients are overwhelmed by the thought of lengthy and complicated litigation.

It is important to understand that, despite what is often represented in dramatic legal or medical television programs and movies, you may have the option to settle out of court.

Your Las Cruces medical malpractice attorney can help you determine the strengths of your case and the best way to proceed.

To get started, please contact our team today.

Do Hospitals Usually Settle Out of Court? 

It is difficult to track all of the medical malpractice cases filed, but multiple data sources estimate that 95% of them settle out of court.

Of course, every case is unique and requires its own legal strategy to seek maximum compensation. That strategy may or may not involve negotiating a settlement offer rather than pursuing litigation. 

There are a lot of reasons that a hospital or healthcare professional would prefer to settle out of court. Settling has its advantages for you too, as it costs far less to settle a case before it goes to trial than to take the case to a jury.

But to accomplish a settlement, both you as the plaintiff and the negligent party must be able to come to an agreement on the settlement amount. 

What Does It Mean to Settle Out of Court?

An out-of-court settlement is an arrangement that involves both parties agreeing to resolve a legal dispute without a court decision.

This allows parties to have more control over the case outcome, rather than risking an unfavorable decision by a judge.

One party cannot force others to settle because everyone with a valid legal claim has the right to have their case heard and decided on by a jury of their peers or a judge if they choose to do so. 

Alternative Dispute Resolution 

Settling out of court is usually accomplished through some form of alternative dispute resolution (ADR). Even though the goal is to resolve the case before going to court, it is always a good idea to have an attorney present during any settlement discussions. 

Sometimes, ADR is preferable because it can include an unbiased third party with medical knowledge or specialized legal knowledge, though this is not always the case. Here are some of the most common types of ADR that can be used for medical malpractice claims. 


This is the most common form of ADR and is often used as a first attempt to resolve a legal dispute. The parties may settle the issue through written correspondence or a meeting between all parties.

This type of ADR is less formal and more flexible than others, allowing both parties a large degree of control over the process and the case’s outcome. 


The parties appoint an independent third party to facilitate negotiations by evaluating the parties’ written submissions and meeting with them individually to understand their perspective and goals.

The mediator will not propose a solution, but will assist negotiations by communicating between parties. They may provide some non-binding suggestions regarding settlement terms. 


More formal than mediation, arbitration is held in a trial-like format. There are multiple styles of arbitration. Depending on the parties’ agreement, the process may be facilitated by an arbitral panel or a single arbitrator.

Some contracts may have a clause that requires arbitration in lieu of or before parties can litigate. 

Neutral Evaluation

The parties present their issues to a neutral third party who is often an expert in the subject matter of the dispute, such as medical malpractice.

The neutral party will evaluate the information and assess the strengths of the case. This process is often cost-effective for both parties because it reduces pre-trial expenses. 


Similar to a neutral evaluation, the conciliation process requires the appointment of an unbiased third party called the conciliator. This person weighs the parties’ respective positions and suggests a solution that works for both parties.

Is a Settlement Agreement Binding?

An out-of-court settlement agreement serves as a binding contract that reflects the compromises of the parties involved. It is legally enforceable and defines the rights and obligations of each party. 

The agreement usually includes the names of the parties involved, the reason for the contract, and the obligations of each party—such as the amount owed, payment schedule, and any other terms of the agreement.

The agreement will also contain a “mutual release” which states that the parties can not make any other claims against each other related to the issue addressed in the agreement. What is not included is an admission of guilt or wrongdoing by either party. 

Is a Medical Malpractice Settlement Confidential?

Unlike trial records, which are accessible by the public, files for out-of-court settlements are considered confidential. This may be important for individuals who do not want their personal information exposed.

Confidentiality may also be a draw for healthcare providers who do not want to expose their negligence. Therefore, choosing to settle out of court may be less of a financial decision and more about reducing bad publicity. 

Is It Better to Go to Trial or Settle Out of Court?

Every case is different, so there is no hard and fast rule as to whether it is best to go to trial or settle out of court. There is a lot to consider, but your lawyer will help you assess the unique variables in your case. 


If you settle out of court, you are guaranteed the agreed-upon amount of compensation. The downside is that it may not be as much as you would have received if you had gone to trial.

Yes, there is always a chance that if you win, you will get far more money from a jury. However, there is also always a chance that the judge or jury will rule against you and you will get nothing. Many medical malpractice claimants prefer the certainty that comes with a settlement.


When medical malpractice claims settle out of court, you are more likely to receive faster payments than you would if you took the case to trial. This could be important if bills are piling up, or you expect that the litigation could drag on for years. 

Stress and Anxiety

Some individuals may feel a strong sense of anxiety around having to attend court proceedings and assist their attorney in gathering evidence to build a case. Settling out of court may provide an option to mitigate some of the stress involved with the legal process. 


Settlements for economic compensation are treated like income and are taxable. However, this does not apply to components of the settlement that cover things like pain and suffering or post-traumatic stress. 

Determining whether or not you should settle out of court is a personal decision that requires careful consideration of your needs and probability of success. 

Contact a Medical Malpractice Attorney

With 70 years of combined legal experience, the medical malpractice attorneys at Poulos & Coates have detailed knowledge of the New Mexico legal system and how to help injured patients receive the compensation they deserve.

As successful litigators and negotiators, we can help you determine the true value of your claim and whether it is best to settle out of court or have your case heard by a judge and jury.

We are the only New Mexico law firm focused exclusively on medical malpractice law. Contact us to schedule your free case consultation and learn more about how we can help you seek the compensation you deserve.

Author Photo

Victor Poulos

Vic Poulos & Greig Coates became law partners in April of 2002, when the two medical malpractice litigators merged their offices, combining what is now over seventy years of litigation experience, to form Poulos & Coates, LLP. Licensed to practice before all State Courts of Texas, New Mexico, Iowa, and Kansas. Licensed to practice before the United States District Courts of Kansas, Iowa, New Mexico, and Texas (Western, Eastern, Southern, and Northern Districts of Texas), as well as the United States Court of Appeals for the Fifth Circuit and the U.X. Ax Court.

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