A recent study in the Journal for Empirical Legal Studies suggests that plaintiffs should strongly consider accepting settlement offers and NOT going to trial. Law Consultant Randall Kiser and Cornell Legal Professor Jeffrey Rachlinski analyzed over 2000 civil cases from 2002 through 2005. According to the study, 61% of those plaintiffs received less in damages than the pre-trial settlement offer. Conversely, only 24% of the defendants were hit with damages larger than the pretrial offer.
First, I haven’t read the entire study, and quite frankly probably never will. [I have serious reservations that anything published in the Journal of Empirical Legal Studies is a fun read.] Secondly, I am not sure what type of lawsuits were studied. But the results are hardly earth-shattering. In personal injury lawsuits when the plaintiff can demonstrate liability on the part of the defendant, and serious damages, those cases rarely see the courtroom. Insurance companies/defendants recognize the dangers of leaving juries decide their fates, and settle the cases for fair amounts prior to trial. If on the other hand, the plaintiff has an iffy liability case, and/or limited damages, the likelihood of a large verdict is pretty remote. The defense recognizes that and is much more comfortable trying the case. Any pretrial offers will be correspondingly small, leaving the plaintiff little choice but to try the case. And, more often than not, tough cases result in defense verdicts. So the results of the study shouldn’t come as a huge suprise. More importantly, the study shouldn’t dissuade those people with strong cases from pursuing them to verdict.