Settlements vs. Trials

Both parties, the plaintiff and defendant, are faced with a decision when confronted with a lawsuit. They must decide, at some point in the process, whether to agree to settle the suit or to take their chances at trial. For both sides, this can mean a known amount versus an unknown quantity with little to no guarantee of success.

A recent study, co-authored by Randall L. Kiser and described in the New York Times, finds that both sides make the wrong decision in an alarming percentage of cases. Plaintiffs make the wrong choice 61% of the time, while defendants choose incorrectly in around 25% of cases. The decision that they have to make is whether or not to take the settlement amount, which may be higher or lower than what they would get at trial, or to take the risk of going to trial and either having the amount be much more or much less than the potential settlement.

When plaintiffs choose incorrectly, they tend to lose an average of about $42,000. This means that the verdict when they go to trial awards them about that much less than the settlement agreement would have paid them. Defendants, on the other hand, choose poorly less often, but it is far more costly. They end up paying an average of roughly $1.1 million more than the settlement in the approximately 25% of cases where they choose incorrectly.

Contact Us

It is important to understand all options and potential outcomes when considering a lawsuit or workers’ compensation claim. For more information, contact the Philadelphia workers’ compensation lawyers of Lowenthal & Abrams, P.C. by calling 215-238-1130.