Most Plaintiffs Who Reject Settlement Offers Do Worse at Trial

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Most Plaintiffs Who Reject Settlement Offers Do Worse at Trial

Posted Aug 11, 2008, 05:49 am CST

By Debra Cassens Weiss

The gamble of going to trial doesn’t pay off for most plaintiffs, according to a study of more than 2,000 civil suits from 2002 to 2005.

Sixty-one percent of plaintiffs who turned down settlement offers ended up faring worse at trial, according to a New York Times story on the study. The average settlement offer was $48,700 and the average award at trial was $43,000, a difference of $5,700.

Defendants were wrong in just 24 percent of the cases, but for them the cost of a bad gamble was must larger. The average plaintiff’s settlement demand in those cases was $770,900 and the average verdict was $1.9 million, a difference of more than $1.1 million.

Plaintiffs were more likely to make poor choices about going to trial in contingency fee cases. On the defense side, defendants were more likely to make poor choices when there was no insurance coverage.

The study will be published in September in the Journal of Empirical Legal Studies.

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Posted by N - 4 months, 3 weeks, 6 days, 19 hours, 3 minutes ago

Seems to jive with reality, (at least where I clerk).
Posted by jk - 4 months, 3 weeks, 2 days, 19 hours, 40 minutes ago

How is this surprising? Most plaintiff’s that turn down settlement offers and eventually go to trial do so against their lawyer’s advice.
Posted by Attorney William Stanley Daniel - 4 months, 3 weeks, 2 days, 19 hours, 37 minutes ago

If more clients followed their lawyers’ case
settlement recommendations, there would not
be such a disparity between settlement and
verdict amounts. Based on experience, I must
presume that those who went to trial, instead
of settling, thought they could “roll the dice” and
come out alright, which is rarely the case. If I
were a betting person, which I am not, I would
wager that most of those plaintiffs who went to
trial and got less than the settlement offers, went to trial over and against their lawyers’
recommendations for settlement, either mediated
or negotiated, but not accepted due to either
greed or foolhardiness. Those clients do best
who follow their lawyers’ advice and accept
their recommendations.
Posted by Associate - 4 months, 3 weeks, 2 days, 19 hours, 30 minutes ago

The study was funded and written by a company that advises claimants. A study finding that claimants often make mistakes in judgment would be naturally beneficial to the company. I can’t really consider this study unbiased, given those facts.
Posted by D - 4 months, 3 weeks, 2 days, 19 hours, 23 minutes ago

N, you meant to type “jibe”, right?
Posted by Andy the Lawyer - 4 months, 3 weeks, 2 days, 17 hours, 11 minutes ago

So much for Gordon Gecko’s “Greed is Good” mantra.
Posted by Uh-Turn-Knee - 4 months, 3 weeks, 2 days, 17 hours, 3 minutes ago

Hey, D, don’t be such a word snob. Technically correct or not, “jive” has long been recognized to be an alternative for “gibe”, which is a variant of your precious “jibe”. Get over yourself.

http://dictionary.reference.com/browse/jive:

[Origin: 1920–25; orig. obscure; alleged to be an alter. of gibe, though the shift in sense and phonetic change are unexplained]

http://dictionary.reference.com/search?q=gibe:

verb
1. be compatible, similar or consistent; coincide in their characteristics; “The two stories don’t agree in many details”; “The handwriting checks with the signature on the check”; “The suspect’s fingerprints don’t match those on the gun” [syn: match] [ant: disaccord]

http://dictionary.reference.com/browse/jibe:

To be in accord; agree
Variant of gibe
Posted by Clueless - 4 months, 3 weeks, 2 days, 16 hours, 56 minutes ago

Why do people hate being around lawyers?

Could it be that we analyze everything everyone says and look for faults, mistakes, etc.????

Hmmmmmmmm. (Comments #5 and #7).
Posted by OldShark - 4 months, 3 weeks, 2 days, 16 hours, 49 minutes ago

My most memorable rejection of a settlement offer by a client had to do with divine advise. She related that God told her to reject the offer and trust the wisdom of the court.

Next time she should ask God for written instruction preferrably on gold tablets.
Posted by Thomas Devlin - 4 months, 3 weeks, 2 days, 16 hours, 45 minutes ago

I wonder how many of those defendants guessing wrong actually paid the judgment against them.
Posted by CM - 4 months, 3 weeks, 2 days, 16 hours, 5 minutes ago

You have to be careful not to draw unwarranted conclusions from statistical studies like this.

For example, the fact that most plaintiffs did worse at trial than the settlement offer, says nothing about whether the plaintiffs who did settle would have done better or worse at trial. It could be that the settlers would have done better - the study does not address this issue. Without it, you cannot validly conclude that more plaintiffs should take what is offered in settlement, therefore this study should not be used to persuade anyone to settle their case.

The study does not address whether doing worse might be the correct result - it does not address the weighted averages of choosing to settle or not. You might want to draw to that inside straight if the pot is big enough. And even if you lose, the decision was still right.

Also, from the lawyer’s standpoint, it does not address the fact that carriers keep books on lawyers and routinely pay the lawyers that go to trial and occaisionally ring the bell much more in settlement. So, if you settle all or too many cases, your clients all suffer. If lawyers as a whole settle too many cases, the system suffers. My grandfather, a long dead trial lawyer, told me that he lost many more cases than he won, but he settled many more cases than he tried. The verdicts were typically enormous when he won. I know that when he settled, he settled for top dollar.

Finally, when the defendants err in their rejection of settlement demands, the study showed they ended up paying far more than the plaintiffs lost when they erred. But the two conclusions are not combined. Why not?

I say, check the verdicts (not settlements) on cases like yours and advise your clients appropriately. I often print out the reported verdicts. I think any lawyer should ignore this flawed type of statistical analysis.
Posted by CC - 4 months, 3 weeks, 2 days, 14 hours, 42 minutes ago

I think plaintiffs should never settle because trials are so much fun!
Posted by Hugh Jasne - 4 months, 3 weeks, 2 days, 14 hours, 16 minutes ago

This is in line with my experience, let alone the costs of a trial (as to experts, exhibits etc.), which do not seem to be accounted for, and the cost (printing) of an appeal, and seems true to me on a macro level: And we have not even discussed the legal time & the client’s time cost and lost.
Posted by Ron Mexico - 4 months, 3 weeks, 2 days, 9 hours, 17 minutes ago

Another thing this study doesn’t take into account is the moral and emotional benefit of having the Court issue judgment in one’s favor. This tends to be most significant in cases where the plaintiff was genuinely and grievously wronged. Not everything in the civil law context revolves around money.
Posted by Idaho Lawyer - 4 months, 2 weeks, 6 days, 17 hours, 55 minutes ago

Well since the states are 61% do worse at trial, that means 39% do better. Its all about risk assessment and what your facts are, because 39% is not a paltry figure. Especially since (according to the article) when Defendants lose they lose big.
Posted by CP - 4 months, 2 weeks, 6 days, 11 hours, 39 minutes ago

The difficulty with the analysis is that it attempts to quantify a complete unknown. Far too many factors must be considered before going to trial. Furthermore, how can a soft-tissue whip-lash type case with no M.D. and three months of Chiro be compared to a catastrophically permanent injury? This is comparing apples and oranges.
Posted by PRINCE ELLA GREEN Texas - 4 months, 2 weeks, 3 days, 6 hours, 20 minutes ago

People tend to think in one direction when it comes to a lawsuit (MONEY) only. If the motive is equally about exposing the defendant for the good of others,then it’s worth what the study call risk.Sure it could be kept quite,collect some money and move on.The sad part about that is Co.& defendents would keep doing to some one else,looked at as the cost of doing business.The study could become a brainwasher for those feeling weak minded with a strong undeniable case.The study can not fit every case.The article mentioned poor decisions to go to trials were frequent,what about those stong cases where the evidence were overwheling? When the defedant attorney see this they will be expecting to offer you peanuts at mediation.I would not be willing to take this article to the bank.
Posted by Roshelle Witty - 4 months, 2 weeks, 2 days, 16 hours, 16 minutes ago

I sincerely applaud Mrs. Green for having the courage that so many of us has never had and for standing up for those of us that don’t have the know how or the means to fight the creditors. Thank you

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