Settle Or Go To Trial?

Are you better off not going to trial?
It was reported in The New York Times that that a study indicated that plaintiffs in civil lawsuits are better off settling their cases and avoiding trial. Statistics from the study showed that the majority of plaintiffs who took their case to trial did not get a verdict that exceeded the last offer of settlement made by the defendant. The statistics were compiled by Randall Kiser, who is principal analyst at DecisionSet (a consulting firm that advises clients on litigation decisions). The results of the study were based on data compiled when defendants and plaintiffs made the wrong decision in going to trial. These statistics were obtained from analyzing approximately 2,054 New York case over a 40 year period ending in 2004. According to the study, defendants were wrong when they decide to proceed to trial 24% of the time. The plaintiffs did not fare as well being wrong 61% of the time.

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An interesting statistic was that in 15% of cases where the parties could not agree on a settlement, both sides benefited by going to trial. The defendant was said to have won by getting a jury verdict less than the plaintiff asked for. The plaintiff is considered a winner by getting a jury verdict that exceeded the defendant's final offer of settlement. However, around 80% to 92% of people settle their cases before trail.

Do attorneys go to trial to get more money?
The study questions the motives of attorneys in proceeding to trial, suggesting a financial motivation. The financial motivation on the part of the defense attorney could be in the form of additional hours which can be billed on the case. This means a higher fee. For the plaintiff attorney, I don’t believe that financial motivation would be that easy to pin point since it is a risk-reward situation. That is, they may get a larger verdict and therefore a larger fee. However, they also may get a smaller verdict and a smaller fee or even a zero verdict which would mean no fee at all.

Insurance adjusters
In my opinion, financial motivation would not affect the attorney's decision making process in deciding whether to proceed to trial. Many attorneys would rather settle within the settlement authority they have from the insurance company than take the risk of going to trial. If this was done often, I believe the insurance company would be looking for a new attorney. There are insurance companies that have policies of making low offers of settlement or forcing the plaintiff to trial. In these cases, the decision making is in the hands of the insurance adjuster and not the defense attorney.

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As for a plaintiff's attorney, they will advise their client to go to trial if that is in the client's best interest. This decision is made by evaluating verdicts from cases with similar fact situations and from that attorney's own experience. Unfortunately, there is no crystal ball or hard fast formula for determining a case's true value. This is why it is important to get advice from an attorney who concentrates their practice in the area of law that is your case. The attorney's experience is a critical factor in the decision making process. This will keep you from becoming a negative statistic.

Michael Schafer
The Personal Injury Attorney for Louisville and Kentucky
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