If you have been in an accident or suffered an injury, you may find the insurance company for the at-fault party making a settlement offer fairly quickly after you have been injured. In exchange for receiving the money, you will be required to sign a release giving up your rights to seek further compensation or file a lawsuit in the future. You may be tempted to take the deal because you need the money to pay medical bills or you are worried that another offer will not be made. However, before signing a release it is important to know all your rights and all the potential legal implications of your claim. Consulting with an attorney can help your understand your rights and make sure that you are not being taken advantage of when you are in a vulnerable position.
A few years ago, the Maryland Legislature enacted a statute that gives the claimant an opportunity to rescind their signature and void the release. This law was passed because insurance companies were using inappropriate tactics to find people and essentially bully them into signing releases. The law enacted reads in part:
Releases signed without advice of attorney voidable
(a) (1) A release of the claim of an injured individual for damages resulting from a tort, signed by the injured individual within 30 days of the infliction of the injuries without the assistance or guidance of an attorney at law, and any power of attorney to or contract of employment with an attorney at law, with reference to recovery of damages for the tort, signed by the individual within 30 days after the infliction of the injuries, shall be voidable at the option of the injured individual within 60 days after the day on which the individual signed the document.
(2) (i) Notice that a release is voided under this subsection by the injured individual shall be:
1. In writing; and
2. Accompanied by the return of any money paid to the injured individual as a result of the signing of the release.
(ii) The release is void from the date that the notice is mailed.
Md. Code Ann., Cts. & Jud. Proc. § 5-401.1 (LexisNexis 2015).
What Does This Mean?
The statute states that a person who signs a release after being injured due to a tort (such as a car accident or a slip and fall) within 30 days of the injuring incident without the assistance or advice of an attorney may be able to get out of the release. The injured party can do this within 60 days of signing the release document.
The injured party must give notice to the insurance company that he or she is voiding the release. This must be done in writing and he or she must return any money that was paid as a result of signing the release.
The Statute Also States:
In addition, within 15 days of a person being injured, insurance companies are prohibited from negotiating or attempting to negotiate a settlement with a person who is still in a hospital or sanitarium. Nor can the insurance company obtain or try to obtain a general release of liability or a statement for use in "negotiating a settlement or obtaining a release." Md. Code Ann., Cts. & Jud. Proc. § 5-401.1(b) (LexisNexis 2015). Any agreement that is obtained cannot be "used in evidence in any court action relating to the injury and may not be used for any purpose in any legal action in connection with the injury." Id. at § 5-401.1(c).
The statute also notes that a release does not apply to a subsequent tortfeasor who is "not a party to the release," and "[w]hose responsibility for the individual's injuries is unknown at the time of execution of the release" or "[w]ho is not specifically identified in the release." Id. at § 5-401.1(d).
Often if you have been injured or in an accident and you contact a personal injury attorney, that attorney will wait until you have reached maximum medical improvement (MMI) before proceeding with your lawsuit. An attorney will do this to make sure that any damages requested adequately compensate you for your injuries because the full extent of your injuries may not be known right after the injuring incident. Insurance companies were trying to cut off their liability early on by having the injured party sign a release soon after an accident. This was preventing injured persons from collecting the full amount of damages owed for their injuries and was the impetus behind the law discussed above being passed.
If you or a loved one has been injured or been in an accident, don't fall prey to insurance company tactics designed to minimize your claim. Please do not hesitate to call the law firm of Gilman & Bedigian today for a free consultation.