Personal Injury Accidents & Medical Malpractice: Settling vs. Trial

Jonathan D. Glater at The New York Times wrote an interesting article on a study comparing settling cases vs. going to trial. The study was based on 2,054 cases that went to trial from 2002 to 2005. The study looked at the dollar amount offered to settle vs. the outcome of the trial.

Notable highlights:

  • According to the article, defendants made the wrong decision by going to trial in 24% of cases surveyed while plaintiffs were wrong in 61% of cases
  • “On average, getting it wrong cost plaintiffs about $43,000; the total could be more because information on legal costs was not available in every case. For defendants, who were less often wrong about going to trial, the costs were much greater: $1.1 million”
  • The findings suggest that lawyers may not be explaining the odds to their clients—or that clients are not listening to their lawyers”
  • Concerning the lawyers, the study tried to account for factors like years of experience, rank of a lawyer’s law school and the size of the firm, but the most significant factor was the type of case.  On the plaintiff’s side, contingency cases were the most common while the defense side errors were generally cases involving unavailable insurance coverage

My guess at the errors in judgment: That the parties made educated guesses and were willing to go to trial. But, the parties may have also gotten too involved in the case with an “all or nothing” approach.

From what I’ve seen, settling is the safest avenue for all parties involved (both the plaintiffs and the defendants). Obviously, that’s not always available.  I like how settling puts both parties in the driver’s seat as opposed to letting a jury or judge decide your fate. The uncertainty of litigation for a client can be a determinative factor. Time constraints are another factor.

It’s interesting that the most common cases involved on the plaintiff’s side were contingency cases. The vast majority of our clients prefer us to work on a contingency basis. The client has already suffered a legal wrong, and putting the risks of litigation on the attorney spreads their risk.