I have been handling personal injury claims for 32 years. I have gone to trial approximately 75 times, or about 2% of all the cases I have handled. Clients often assume when they hire a lawyer there is a good chance they will go to court. In reality, the chances are slim that a jury will ultimately decide your case. There are various reasons why cases settle, and there is an old saying that a good settlement is when both sides feel a little unhappy. So, if you find yourself asking, “Should I settle my lawsuit?,” I’m going to fill you in on why most cases settle, and provide a bit of insight as to when it is absolutely necessary to go to trial.
Should I settle my lawsuit, or will I make more if we go to trial?
First, I’m going to start off by telling you that trials are expensive. In Clark County, there are different rules depending on the likely value of the case. In cases where the likely value is less than $50,000, the case initially goes to a non-binding arbitration. What that means is a lawyer is assigned to hear the case, a decision is made, and each side has 30 days to appeal to a jury. To get to arbitration takes about six-eight months from the filing of the complaint, and costs about $1,200. These costs are taken right off the top, before attorney’s fees, doctor’s bills, or payment to the client. If the case does not settle sometime at this level, the case proceeds to a one day jury trial. That costs another $1,200 or so, bringing the total costs of the lawsuit to approximately $2,500. Again, this comes right off the top.
Determining the settlement value of a case
Many times there are negotiations before filing the suit, and after filing suit at any time before or after an arbitration hearing is held. It is the lawyer’s job to figure out a good “settlement” value, which is not necessarily what a jury may give you, but a range where the client gets decent compensation for his injuries. For example, client A has $5,000 in medical expenses and soft tissue injuries as a result of a rear end accident with moderate damage to the vehicles. He treats for three months and is recovered after treatment. An offer is made by the insurance company of $8,500. All the medical expenses are owed because they are on an attorney lien. There are virtually zero costs at this point. The value of the case could be $10,000-11,000. With reduction of medical bills to $4,000, the client would get $2,250 (attorney’s fees would be reduced to $2,250, as at Craig P. Kenny & Associates, the lawyer never makes more than the client!). The lawyer recommends settlement . . . the client says no. A year later, he gets his $10,000, but now there are $1,500 in costs. The client ends up with the same amount a year later . . . and that’s if everything goes right. Oftentimes in litigation the defense comes up with prior records, they have a very presentable defendant, etc. So if the case goes all the way to trial two years later, the costs are now $2,500, but the value of the case stays the same. Sometimes the costs can be recovered, but not likely. So in the end, $8,500 today is as good as or better than $10,000-11,000 a year or two from now.
In a bigger case more than $50,000, the stakes are higher. Costs on both sides can be $20-30,000 if multiple doctors have to testify. Client B decides to turn down $100,000 where he can put $30,000 in his pocket. For whatever reason, he thinks his lawyer has severely undervalued his claim and wants $250,000. First, the lawyer is trained to value the case, the client is not. Clients tend to overlook the weak points of their case . . . , i.e., prior accidents, injuries, low property damage, etc. Putting that aside, if the case goes to trial, four things can happen, three of them bad, and one may be good. The jury could give him less than the $100,000 that was offered three years earlier. (That’s the average time it takes to get a civil case to trial . . . there is no arbitration before trial). If that happens, the client is going to owe the defendant $30,000-$50,000, since he did not beat their offer. This comes off the top, and the client ends up with next to nothing out of the $100,000. Second, there could be a mistrial and would have to be tried all over again, with double the costs. Third, the jury could give him a little over the offer. If it is not more than $140,000, it is probably a wash with all the costs and time involved. Fourth, the client turns out to be right and the jury gives him $300,000. The defendant then promptly appeals, and it sits in the Nevada Supreme Court for two years. If the Supreme Court finds errors of law (not uncommon), there is a new trial ordered.
So the bottom line is, don’t be so gung-ho to go to trial. Be receptive to an offer that can get you as much in your pocket now than more money two years from now. Try to avoid leaving your fate in the hands of eight citizens who have never valued a case and never will again. Try to avoid the enormous costs, passage of time, and risk in going to trial.
There are times when trial is unavoidable. First, where there is a liability dispute, those cases are more likely to have no offer and you have to go to trial. Of course, if we take that case, we have to be confident we can prove liability. Word against word is not enough. Second, a car accident where there is little property damage tends to be tried more often. Again, we have to have a strong case to take this to trial because juries generally don’t like accidents where there is no visible damage.
The third type of case that goes to trial is the above example where the client has unreasonable expectations for his type of injury, and the lawyer goes along for the ride. It is our job to allow that not to happen, and educate the client on how we came up with the value range. We settle cases every day for years; we read the trial reporter; and we know what cases settle for in this community. Trust us when it comes to settlement negotiations. Fourth, there are times when the insurance company is low, and stays low. When that happens, we go to trial to get you what you deserve.