IS SETTLING YOUR CASE BETTER THAN GOING TO TRIAL?
Recently on August 7, 2008, The New York Times published an article with the caption “Note to Victims of Accidents, Medical Malpractice, Broken Contracts and the like; When You Sue Make a Deal”. Author Jonathan Glater stated the clear lesson of a soon to be released study of civil lawsuits has found that most of the plaintiffs who decided to pass up a settlement offer and went to trial, ended up getting less money than if they had taken that offer.
As a personal injury and product liability lawyer in Philadelphia with 30 years experience, it is my position that the vast majority of cases do settle for a proper and just amount if properly prepared from the outset. Randall Kiser, a co-author of a study and principal analyst at DecisionSet, a consulting firm that advises clients in litigation decision notes that 80 to 92% of all cases settle and that furthermore, there is no way to know whether either side in most cases could have done better in trial. In September, a study will be published in the September issue of Journal of Empirical Legal Studies noting that mistakes are more often made in cases where lawyers are paid a share of whatever is won at trial.
As I have personally been involved for close to 30 years with thousands of cases, solely on a contingent fee basis, I believe that it is necessary for the lawyer to explain all of the facts of a claim or the “good, bads and uglies” to their client and properly explain the odds for success and/or failure based in the jurisdiction where the case is to be litigated.
We inform each of our clients that they will have the ultimate decision whether to accept or deny a settlement figure. We find often that some lawyers, whether they are wrongful death or auto product liability attorneys, simply do not prepare their cases to the best of their abilities and in fact, some times other lawyers egos get in the way of a proper and full settlement. Mr. Glater, in The New York Times article, claims that law schools do not teach lawyers how to handicap trials nor do they help develop the important skill of telling the client that the case is not a winner. Obviously, clients do not like to hear such news.
A good lawyer must be able to tell their client their honest evaluation of the claim based upon their years of experience in their particular field. Many lawyers may view the same case differently. At our law firm, we welcome the client’s securing of secondary or third opinions so that the client may have another set of experience or eyes so that they may feel comfortable with their ultimate decision whether to accept a settlement or proceed to trial. Of course, it is well said that there are no guarantees in life but for taxes and death and it is never possible to fully predict how a jury will react. Sometimes we have found that what we considered to be our worst cases have brought some of our largest verdicts and other cases where we thought we had an excellent chance of recovery for a substantial amount have disappointed us and our client. In Jonathan Glater’s New York Times article, notes that defendants made the wrong decision by proceeding to trial far less often in 24% of the cases, according to the study, and plaintiffs were wrong in 61% of the cases. In just 15% of the cases, both sides were right to go to trial - meaning that the defendant paid less than the plaintiff had wanted but the plaintiff got more than the defendant had offered. These findings were based on a study of 2,054 cases that went to trial from 2002 to 2005.
What most people fail to realize is that the euphoria of big verdicts often runs headlong into hard financial reality. Soon after riches are announced, history reveals a few people ring every penny out of a large jury award. Sometimes after a substantial award, appeals are pending and most cases are generally settled for far less than the verdict. Sometimes, the people who receive the large verdicts collect nothing. A recent study indicated that total collections of jury verdicts were only 13.2 cents on the dollar. For many people, the risk of non-payment or the delay of eventual payout indicates that they may be better off taking a quicker settlement even for a lesser amount. Also, of course, as the case proceeds through the litigation chain, expenses mount. A study of million dollar plus verdicts published by The National Law Journal indicated that of 100 plus million dollar verdicts, 32 were set aside by trial judges or reversed by appellate courts, 33 were reduced by trial or appellate court judges and some were settled swiftly after the verdict but for far less than the jury award. Some reductions by judges were massive. The study showed that most verdicts of one million or more are hollow or reduced.
In a study published by Lawyers USA on February 5, 2008, the headline was “Nation’s Largest Verdicts Just Keep Getting Smaller”. The article notes that after climbing towards the stratosphere from 1997 to 2002, the largest verdicts to individual plaintiffs have been in steady decline ever since. The total top ten awards for 2007 dropped 25% for 2006, which was 72% lower than in 2005. To put this trend in perspective, the total of the top ten verdicts in 2002 was 41 times larger than the amount awarded in 2007. A few years ago, all ten of the top verdicts in the United States were for more than $100,000,000. Two years ago after five verdicts cleared that mark, and in 2006 only three verdicts topped $100,000,000. In 2007, only two verdicts had that distinction. Punitive damages have also experienced a dramatic decline. The total punitive damage among the top ten verdicts in 2007 dropped 36% from 2006 and this occurred after the total punitive awards had dropped 83% from 2005 through 2006. Punitive damages made up only 33% of the total top ten awards in 2007 compared to 66% over the last 11 years.
Like a pendulum, the litigation climate is constantly changing. Plaintiffs must develop a close working relationship with experienced counsel and have open dialogs regarding “the good, bads and uglies” of their claims and the risks and rewards that they will be subjected to by taking their case to trial. You must understand all of the risks. My Pennsylvania personal injury lawyer colleagues have found that people are more adverse to taking a risk when they are expecting to gain something and more willing to take risks when they have something to lose. There is an old saying that states “A bird in the hand is worth two in the bush”. It is important when selecting your lawyer that you do not select a lawyer who is more interested in satisfying his own ego and achieving a headline than what is best for the client. It is important for the client to determine whether or not the lawyer is putting his own personal interest ahead of the financial interest of the client. Unfortunately, many lawyers have large egos and are interested in taking chances that may not be in the client’s best interest. I have found often times that lawyers may not be accurately expressing the odds of success to their clients or that clients are not listening to their lawyers all of the time. Each case and client is unique and of course, past results of a lawyer’s success should not guarantee future outcomes for a particular client.
As I travel throughout the United States attending various conferences or conventions and speaking with my experienced legal brethren, I am learning that juries are becoming more “socially conscious” or reasonable.
The goal of the trial lawyer is to fight honestly and tirelessly on behalf of their clients in pursuing a just result and to promote a fair and effective justice system. Whether this goal is achieved by way of a verdict or settlement requires experience and understanding of many factors unique to each individual case.
If you are in need of an attorney with such experience and understanding, please contact the Pennsylvania personal injury and Pennsylvania vehicle injury lawyers of Reiff and Bily.
