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Study Suggests That Plaintiffs Are Better Off Avoiding Trial - Is This Correct?

Posted on Aug 19, 2008

The age old question for a plaintiff attorney is whether to advise your client to accept the offer made by the insurance company or roll the dice and take the case to trial. S this the best and highest offer you are going to get? Is it the bird in the hand or two in the bush? In the past I have used my own experiences along with the jury verdicts reports of trials with similar fact situations and injuries to determine the value of the case. Other intangible items such as the type of witness the plaintiff will make or their jury appeal are also considered. Now there has been a study in New York as to how well plaintiffs and defendants in civil lawsuits did when they elected to go to trial and reject the final offer made.

The results of a soon to be released study that has been reported in The New York Times suggest that plaintiffs in civil lawsuits are better off when they settle their case and should avoid going to trial. The study reports statistics that show a majority of plaintiffs who take their case trial do not get the verdict they had hoped for. More times than not, the verdict does not exceed the last offer of settlement made by the defendant.

The statistics in the study 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 is based upon data compiled as to when Defendants and Plaintiffs make 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 are wrong when they decide to proceed to trial 24 percent of the time. The Plaintiffs did not fare as well being wrong 61 percent of the time.

An interesting statistic that is reported to be in the study was that in 15 percent of cases where the parties could not agree on a settlement both sides benefited by going to trial. The defendant is 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.

Estimates based upon statistics in the study state somewhere between 80 to 92 % of cases settle. The study questions the motives of lawyers 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 the 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, but they also may get a smaller verdict and a smaller fee or even a zero verdict that would mean no fee at all.

In my opinion financial motivation would not affect the attorney's decision making process in deciding whether to proceed to trial. Most defense attorneys I know are over worked and have more cases than they have time for. They would rather settle within the settlement authority they have from the insurance company than take the risk of going to trial and the plaintiff getting a verdict larger than that authority amount. 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 not the defense attorney.

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 cases' 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. Make sure your attorney is frank with you in his opinion of your case and you will have better odds of making the right decision for you. This will keep you from becoming a negative statistic.

It will be interesting to look at this study and evaluate the raw data. As with any study, the types of cases used, the lawyers involved, the judges involved and the laws of the state where the study was conducted can all have an effect on the results.