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Extortion (Score:2)
This sounds like an extortion scam. He wants to settle it "in a reasonable fashion", which sounds like he means he wants you to give him money not to make a claim. He figures you'd rather lose a little money than a lot of money, even if you did nothing wrong.
I would say you should go to the appropriate law enforcement agency and make a complaint. If there was an accident, there has to be a police report.
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