Maximized Results Through Sophisticated Analysis Of Settlement Options

June 21, 2007

Although the law firm of Aitken * Aitken * Cohn prides itself in our long history of excellent results at trial, many cases can be successfully resolved through settlement. One of the most frequently asked questions encountered by our law firm is: “How do we evaluate cases for settlement purposes?” Our firm takes a sophisticated approach in analyzing the factors that affect the evaluation of each individual case, with the goal of maximizing our clients’ return with each settlement.

At its most basic level of analysis, evaluation for settlement purposes must be accomplished with an eye toward the “alternative” to not settling — likely trial outcomes. Thus, in determining whether to resolve a case through settlement, the first consideration must be the likelihood of winning and losing at trial. As a very basic example — if there is a 50% chance of winning $1,000,000.00 at trial, then a $500,000.00 settlement should be carefully considered. Unfortunately, the analysis is rarely quite so simple or clear-cut.

In many cases, there are multiple parties who share a percentage of fault for the plaintiff’s injuries or damages. Under California law, each defendant is legally responsible only for his/her percentage share of the plaintiff’s non-economic damages (i.e. pain, suffering, emotional distress, etc…), but any defendant who shares even a small percentage of fault is responsible for all of plaintiff’s economic loss (i.e. loss of earnings in the past or future, medical expenses in the past or future, etc. . . ) This legal doctrine often makes settlement evaluation very complicated — particularly when a defendant who shares only a small portion of fault is called upon to pay a larger portion of the settlement due to the inability of other more culpable defendants to compensate the plaintiff fully. Likewise, the fault of the plaintiff himself for causing his or her own harm is often a factor affecting settlement evaluation. If a jury at trial finds the plaintiff to be a certain percentage at fault for his/her own injury or damages, then his/her damages award will be reduced by that percentage.

As to the value of each case in terms of actual dollars, there are again a number of factors which can affect the evaluation. Some aspects of the evaluation are easier to quantify than others. For example, the medical expenses are often concrete and undisputable. However, often times even economically definable losses are the subject of a great amount of dispute amongst the parties. For example, whether an injury has caused the partial inability of the plaintiff to earn as much as he would have earned in the future had the injury not occurred often becomes the subject of testimony from expert medical doctors, vocational rehabilitation experts, and economists retained by both the plaintiff’s and defendant’s attorneys. The analysis then turns to the question of which side’s experts are more likely to be persuasive to the jury on each given issue.

The issue of evaluating non-economic loss (i.e. pain, suffering and emotional distress) is often the most difficult aspect of settlement evaluation. There is no “calculation” per se to be performed to evaluate such damages. As such, we look to a variety of factors in an effort to provide a sophisticated analysis as to the most likely range of results that one could expect from a typical jury. We often research past jury verdicts with similar injuries or fact patterns to see what past juries have done with similar cases. We must also take into account the severityof the conduct of the defendant, and the positive or negative impression that the defendant will likely make before a jury. Likewise, we assess our own client’s ability to present themselves well to a jury.

Ultimately, each case presents a unique set of variables which drive the settlement evaluation analysis. By being aware of all the various factors that might have some effect on the evaluation process, it is our intent to maximize the settlement results in each case. It is our hope that this article sheds some light for our clients on how complicated such analysis truly is.

To illustrate how the evaluation process played out in a variety of contexts, here is a representation sample of some of the matters resolved in the last few months.

• MOTORCYCLE – Plaintiff was operating his motorcycle when defendant’s vehicle from opposite direction turned left and collided with plaintiff resulting in shattered left, broken pelvis, internal injuries and a serious injury to the tissue of the foot. SETTLED for $750,000.
• NEGLIGENT SUPERVISION – Wrongful death of 8 year old boy who drowned while on a field trip with a day camp. A claim was made against the organization who organized the field trip. SETTLED for $975,000.
• COMMERCIAL VEHICLE NEGLIGENCE – Plaintiffs were passengers in a private vehicle when a piece of sheet metal came off a mobile home which was being towed by a truck in front of them, and slammed into the windshield. The driver was unable to control the vehicle and it rolled. Plaintiffs suffered severe injuries including fractures to4 cervical vertebrae and severe road burns. SETTLED for $495,000.
• HIP REPLACEMENT SETTLEMENTS – Seven plaintiffs sustained a multitude of orthopedic complaints after defendants surgically implanted defective hip implants resulting in the need for removal and replacement of new hip implants. Our clients were members of a nationwide class action lawsuit against the manufacturer. SETTLED for $1,650,000.
• INSURANCE BAD FAITH – Estate of plaintiff filed a bad faith claim against two insurance companies for their handling of her insurance claim following the complete destruction of her home and its contents in the 1991 Oakland Hills firestorm. Due to insurance company delay, plaintiff died before house was reconstructed. SETTLED for $3,000,000.