Case Value, and Why Lawsuits Are Not Like Diamonds

“Should I accept this settlement offer?”

“What is my case worth?”

I have been asked these, and similar, questions many times by my clients. They are excellent questions, and the client’s motivation for them is clear and understandable: they have been presented with an option – accept or reject a settlement offer, appeal or leave be a jury verdict, etc. – and must make a decision. The decision is indeed theirs to make; while lawyers often must and do make certain decisions (regarding, for example, trial strategy, which formal causes of action to assert, and so on) the decision whether to settle a case, and for how much, is the client’s to make.

Naturally, they turn to their lawyer for input. And more often than not, the only answer I can give is “it depends”, “maybe, if…”, etc. While those answers can be frustrating, they are really the only answers a lawyer can credibly give.

In my view there are three (related) reasons for this: (1) no credible/experienced lawyer can or should ever guarantee any result (unless they can predict the future, which they clearly cannot); (2) there are many variables – some known, some not known, and some not yet known – that bear upon the analysis; and (3) case “value” is not an objectively-quantifiable thing (unlike, say, a diamond; while different diamond experts may disagree on the value of a particular stone, the “thing” being evaluated is finite, set, bounded and crystallized (pun intended)).

A lawsuit, on the other hand, is constantly evolving, as new facts, information, and even the law (e.g., new case law) may drastically change the legal landscape.

Those variables include the other side’s willingness to settle, new/not-yet-known facts, and the jury that will hear your case. That’s right – two cases with otherwise identical facts and involving the same laws can be evaluated differently by two separate juries (who are, after all, people and not computers).

Consider, as an example, an employment discrimination case involving an alleged wrongful termination, where the defendant/employer makes a settlement offer. Should the client accept it? In making this determination, the following must be considered:

  • If the client has not yet obtained new employment, when might that occur? And what will their new wages be? This will affect the calculation of lost wages, a key factor in evaluating damages in an employment discrimination case.
  • How will the client’s medical condition/treatment (for, e.g., discrimination-related stress, anxiety, etc.) progress? This will impact the compensatory/emotional distress damage component.
  • How might a jury view the case? Accepting the offer makes sense if it’s likely for a jury to award less than the current offer; the converse is also true. Unfortunately, jury verdicts are inherently unpredictable.

While other cases or court decisions might (and indeed often do) provide helpful guidance, every case has different facts, and changing just one could significantly affect the conclusion. The same goes for settlements, since what one defendant/employer deems a reasonable settlement (based on various business considerations) might not apply directly to another company’s decision-making process.

So should you accept the current settlement offer? It depends.

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