How do You Value a Case?

Both plaintiffs and defendants, both before litigation and during it, are faced with the serious question of how to value a case? Are there any rules to determine a cases value? Are there even any guidelines to determining a case’s potential value? What factors are important? What are key elements to address when seeking to establish a case’s value? Perhaps most importantly – who decides a case’s worth?

If the case is engaged in civil litigation, the jury ultimately shall decide the case’s value, if a jury trial is demanded. Otherwise, it could be a judge or mediator. Are there different factors that are important, depending upon who makes the ultimate decision of the case’s value? Even potentially more important, who determines a case’s value for settlement? What rules are there to follow?

Most cases involve some element of emotionally charged issues. Either a person has sustained personal injuries, or a company has incurred potentially devastating losses. A defendant may have been wrongfully accused of a serious tort, blamed for significant injuries or catastrophic losses. A plaintiff may be seeking exemplary or punitive damages for an intentional wrong, fraud or deceit. Does the emotional loss have a value? How is it determined, since any event or circumstance may have a different effect on diverse people or companies?

Frequently, when offering settlement values for settlement recommendations, a judge or mediator may offer some analysis of the plaintiff’s damages, whether they are the breach of contract damages, the personal injury medical expenses, the employee’s lost wages, a company’s missed profits or opportunity or a person’s or company’s residual injuries or complaints. Also, judges and experienced mediators may refer to past experience, past history, regarding what juries have awarded for similar cases with related damages, or what other analogous cases have settled for. Yet despite the many unknowns, cases are frequently valued both for settlement or trial preparation purposes. How is this done?

Certainly, a consideration of the parties’ actual losses, either incurred medical expenses, out-of-pocket breach of contract expenses, real losses and damages, are greatly considered in evaluating a case, as is the parties’ residual losses—either in the form of permanent or ongoing personal injuries or ongoing business losses or expenses.

How does a jury come to value a case, if they are prepared to make an award for the plaintiff? Jury deliberations are secret. Jurors are seldom if ever asked about deliberations. Further, each jury’s rationale, considerations or decisions is different from every other jury’s.

Although jurors are not required to discuss the case, they are usually free to do so, but only after the verdict is rendered. Jurors may offer the trial counsel feedback, or potentially even insight into what the jury felt was significant, or how deliberations were conducted. An experienced trial lawyer will have argued many times before the jury, and asked the juries after the trial what was effective in the presentation, what resonated with the jury and what the jury disliked. This information provides invaluable to the lawyer seeking to evaluate other cases and make recommendations to clients.
Further, a more experienced lawyer will have been engaged in countless settlement conferences, mediations and both court and jury trials. This history of litigating and settling many cases grants counsel greater insight towards the case’s value. Also, the most diverse the lawyer’s practice and experience assists in evaluating cases, have handled similar cases in the past, and being able to see how they settle, or how juries find on similar facts.