When trying to figure out the settlement value of a personal injury case, trial attorneys pull from usually only one resource: they’re own experience. We pull from our own cases and from cases we have heard about from other lawyers. But how good are we at valuing cases?
First, it is important to underscore how unbelievably important this skill set is for trial lawyers. Most of the time, when a case goes to trial, it is because someone miscalculated the value of the case. The insurance companies rely heavily on data in valuing cases (which sometimes reliably cements their reputation as unfeeling robots). While they deny it, they continue to believe that they can predict how much money a jury is likely to award based on the relationship between the amount of special damages (medical bills and lost wages) and the award for noneconomic damages. Sometimes this logic does hold. The key skill for personal injury lawyers if being able to identify which cases defy the data because of intangibles that data cannot measure.
Most notably, insurance companies invariably devalue the character, or lack thereof, of the plaintiff which is just an unbelievably critical value marker. So the insurance company’s predictions misfire both ways. Knowing when the insurance company has miscalculated the value of a case gives you a tremendous advantage over the insurance company because you know which offers or demands should be accepted – some will be steals – and which cases should be tried.
An article titled “Predicting Civil Jury Verdicts: How Attorneys Use (and Misuse) a Second Opinion” written in the Journal of Empirical Legal Studies provides the answer as to how personal injury attorneys do as a class in estimating verdicts: not good.
The average error for lawyers in predicting the value accurate was 0.387. For a verdict of $100,000, this is equivalent to an estimate of $244,000 or $41,000. That’s a big range. With those estimation skills, it is a wonder more cases don’t go to trial.
The study found that when you averaged the estimates of more lawyers – testing the idea of bouncing case value off other attorneys – the average estimation error dropped to 0.228, which on a $100,000 case is equivalent to an estimate of about $169,000 or $59,000. When expanded to 28 lawyers, the average estimation error was 0.130, equivalent to an estimate of $135,000 or $74,000.
This study underscores the importance – particularly for solo practitioners – of getting multiple opinions on the case. A couple times a week at our firm, we will end up talking/arguing about the value of a case.
But we circle back to a leitmotif: there are a lot of variables at play in figuring out the value of a case. It is really hard to convey all of the relevant facts in a case to another lawyer with having that attorney read the medical records, meet the client, read her deposition transcript, and so forth. If you are not providing all of the relevant information — which is hard to do — it is tough for even the best lawyer at valuing cases to give you a meaningful opinion. This study, which valued cases by reading jury verdict reports, really did not control for this. But the take home message is clear: get second, third, and fourth opinions on how you evaluated the case.