There are many factors which drive a plaintiff's attorney or his client to settle a personal injury case, whether it be on the courthouse steps or at a much earlier stage. Those factors have changed somewhat over the years, primarily with the advent of the arbitration system. Many attorneys have never tried a case to a jury and their whole focus is to either settle or go to arbitration. Since arbitration is not a major undertaking, there is not a huge difference in terms of preparation between settlement and letting an arbitrator determine the value of the case. Because of the nature of arbitration and the repetitive use of the same arbitrators, valuations tend to become closely aligned with the kind of dollars which are paid in settlement.
Because of the arbitration system, there are very few cases that are not of significant value which end up in front of a jury. Particularly from a plaintiff's standpoint, the cost of putting on a full-blown jury trial is enormous, and the case has to warrant that kind of expenditure in both out-of-pocket costs and time. As a result, most cases are settled. That may be good from the standpoint of judicial administration, but not so good for many plaintiffs.
The statistics show overwhelmingly and consistently that in any given period, as reported by the various jury verdict publications, the total of plaintiffs' settlement demands are strikingly close to the total verdicts and usually ten times the total offers made by the defendants. The advantage that the defendant has is that, on an individual basis, many plaintiff's attorneys and plaintiffs must, of necessity, look at a particular case without regard to the general statistics. It can be a major disaster if a plaintiff in a substantial case loses the case or obtains a significantly smaller result than was offered in settlement. However, for any given reporting period, it is painfully obvious that, despite these isolated casualties, plaintiffs as a group would be monumentally well-served by going to a verdict in every single case.
One can take the reports from the Daily Journal or any of the various jury verdict reporting publications and chart the results during any issue of that publication and the conclusion is always the same. One of the more popular jury verdict publications regularly lists the gross amount of all verdicts in each particular issue, the gross amount of all of the total plaintiffs' demands and the gross amount of all of the total defendants' offers. These are further divided into various categories of cases, such as product liability, medical malpractice, premises liability, automobile accidents, etc.
Month after month, the cumulative totals of offers, demands and ultimate results are almost always the same. There will usually be approximately $20million in total verdicts, $20 million in total plaintiffs demands and $2 or $3 million in total defendants' offers. These kinds of statistics show up publication after publication and are too consistent to be the result of chance. More specifically, in a recent issue, in product liability cases the total demands were approximately $4.5 million, the total verdicts were approximately $31 million and the total offers were less than $1.2 million. Even in medical malpractice cases, the total demands were almost $12 million, the total verdicts were approximately $15 million and the total offers were a measly $1.3 million. Plaintiff's demands, as outrageous as some critics may argue they are, tend to track jury verdicts month after month and year after year. Part of this phenomena may be due to the fact that plaintiffs tend to ask juries to award sums which are closely approximate to their demands. In those states where plaintiffs are not permitted to request a specific amount for pain and suffering, it is amazing how often the verdicts are substantially higher than the amounts demanded by plaintiffs in settlement. This supports the notion that, in a good case, there is no particular risk in overstating the damages because the jury might award that amount anyway.
There is no doubt that insurance companies and defendants have a tremendous advantage due to the fact that they can offer just enough money to tantalize the plaintiff and make it difficult for him to reject it and take his chances in court. The defendant's insurance company, on the other hand, can afford to suffer a monstrous verdict every once in a while and have little, or no effect on their bottom line. Smartly, they tend to pay significantly larger numbers in settlement to skilled trial lawyers who have demonstrated the ability to maximize the value of cases. The lesson to be learned from all of this is that if the plaintiff's attorney is skilled and the case is meritorious, there is never a good reason to settle the case for so-called "settlement value." The case should be settled for its true value because the statistics bear out overwhelmingly that nearly all plaintiffs represented by skilled counsel with meritorious claims will do far better in trial than some highly discounted "settlement value" which might typically be offered by an insurance company.