A Simple Recipe for Valuing a Personal Injury Case
A number of years back, I was fortunate enough to receive a personal injury case referral from a well-respected, skilled, and senior lawyer whose practice didn’t include personal injury. After my initial client meeting, the referring lawyer phoned asking what the case was worth. Naturally, I said, as all great lawyers do, “I have no idea.” The terrific, senior and well-respected referring attorney then suggested I look the case up in my P.I. Lawyers’ Book - you know, the book that tells you what every case is worth. This lawyer assumed I had a book on my shelf enumerating the worth of each case. There is no such book. Every case is different.
There is, though, a cookbook, of sorts, as there are many ingredients to consider when valuing a case. Given the space, this article is not exhaustive, but it should get you thinking about how to “cook up” your cases. Before beginning, if you have anything negative to say about what is written here, take it up with the late, great David L. Nixon, who taught me everything contained herein, including how to properly use the word “herein,” or with my 12 year-old-daughter, Rebecca, who suggested I use the cookbook theme.
Naturally, and obviously, the main ingredient is your client. It’s an old saw, but “a good client can make a bad case good and a bad client and ruin a good case” cuts as sharp today as ever. If your client shows up with a brown paper bag of receipts, records and bills for that first meeting, your case value just went down. If your client has had 16 other cases with 19 other lawyers, your value went down. If your client hasn’t held a job for months, including before the injury, your value went down. If, however, your client is a hardworking, responsible citizen, or, maybe a veteran, with real family and friends whose Facebook page doesn’t scare your staff when they first review it, you’ve added a few dollars to your claim. I always try to impress upon my adjusters (and defense counsel) the impression, if favorable, I think my clients will have on a jury. To do this, you can send a video interview you’ve done with the client, let the adjuster take an interview or allow defense counsel an off the record chat with your client, pre-suit.
All of these approaches save time and money, putting more into your client’s pocket. I know, there are dangers to all of these approaches, but the point is simple, accentuate the positive, eliminate the negative. If you don’t get the warm and fuzzies from your client, no one will. Why take the case? To this end, you need to know your client, well. Have real, non-lawyerly, conversations with them about their lives, their values and their story. Dave always sent a biographical questionnaire that asked if they had “won the good attendance award in kindergarten.” This information creates value because it makes you a more personal advocate.
Liability, is, of course, another key ingredient. If your proof of fault is hard to comprehend, your value is lower than if it’s a simple, straightforward argument. If you have a history of bringing cases with questionable liability, your value is lower. If, however, you have a history of dropping, after investigation, those cases with weak or no liability, you build value for the cases that should move forward.
The next most important ingredients are, arguably, the damages. First, as to damages, ignore the idea that a case is worth some multiple of the damages; that’s just dumb. It lacks thought and creativity. The specials are a vastly overrated measure of case value. Not a single juror in the world has any idea what a special damage is and why it should be part of verdict. But, as you examine the medical specials, make sure all the treatment is related to your injury. We use a wonderful nurse paralegal to help us. Also, make sure all the treatment you claim, and the amount billed, is reasonable and necessary.
As far as the plaintiff’s bar is concerned, the amount billed, not the amount paid by some health insurer for medical treatment, is the reasonable value as New Hampshire is a Collateral Source Rule State. Know, when valuing your case, some on the defense side disagree. If you allege lost wages, be able to prove them with tax returns and employment records. Each additional piece of proof adds value. Beyond the specials and any obvious hedonic damages, get creative. One of my Deaf clients with a broken arm cannot use American Sign Language fully. Her injury is more than just the pain and inconvenience of a broken arm; it’s an inability to communicate with her friends and family. To express that point, I might spend the first several minutes of a mediation using only sign language without an interpreter until the adjuster understands the injury isn’t a broken arm, but isolation. You have to fully understand how whatever your client’s injury happens to be truly affects his or her life. If I broke my leg, my life would hardly change, but to an avid runner who misses her first chance to run the Boston Marathon, it could be life changing. Also, there is a tremendous difference in the value of pain from soft tissue injuries and broken limbs. Broken bones just have a higher value. Understand, as well, that different treatment has different value; chiropractic care isn’t as valuable at physical therapy.
An essential ingredient to every good case, every case with a high value, is one image you can return to repeatedly. It has to be something that is hard to ignore, and it has to be obvious. If you have a slip and fall but don’t have a good picture of the danger, your case is less valuable than if you have photo showing a huge crack in those steps. Having video from a nearby gas station surveillance camera of the defendant running a red light and flipping both cars over adds a lot more value to your case than a stale police report. The image can be of an injury, the crash or even a pithy excerpt from a medical chart, but, whatever it is, it has to be easy, very easy, to understand. If it is, you’ve added dollars to your case. If, however, the only exhibits you have require you to explain them, subtract some value from your case. Leaving anything to a juries’ imagination means leaving it to 12 separate and distinct imaginations. Consolidate those individualized ideas of a hazard or an injury or whatever into one thought using your image.
An often-overlooked ingredient is the defendant. We all know that defense lawyers, upon taking our client’s depositions, write reports about the plaintiff’s demeanor, how they will be received by a jury. I’ve even advised, already, that you do that yourself. I often do the same in my mediation summaries and settlement demands, but, of course, about the defendant. While an out-of-state, jerk can add value to your case, a nice guy who comes across sincerely can just as easily take it away. Don’t skip the defendant’s deposition. You need to know this person. Be as thorough investigating the defendant as defense counsel is in investigating the plaintiff. Does the defendant have a criminal record? Relevant and admissible or not, it adds value. Divorced sixteen times? Same thing. You get the idea.
Speaking of defense lawyers, the defense lawyer makes a huge difference in the value of any case. I mean this few ways: first, the defense lawyer will have a view of the case’s value, so why not ask? This is New Hampshire, most of the defense bar are great people who want to work with you to resolve disputes not against you to fight them. If their view is similar to yours, great, if not, go over your list of ingredients again, together, maybe one of you missed something. Second, let’s be honest, some defense lawyers settle more and try less and with others, it’s the opposite. As a result of simple math, as you’ll see below, whether you are settling or trying a case, effects it’s value. Third, the more open your defense counsel is to be educated about your point of view, the higher the value – even if that lawyer doesn’t agree. If, however, you have someone you know is closed to new ideas, the value will, necessarily, be less. Also, to be totally fair, some lawyers, on both sides, are just better and that effects values in both directions. If you’re one of them, you know who you are. If you aren’t, you know that too.
Generally speaking, most settlements, and verdicts, are actually paid by insurance companies and every insurance carrier has a different way it values cases. I’m not saying I have kept data on the different carriers, and who pays what, but, as you build a personal injury practice, it’s a good idea. But, let’s get something straight; all insurance companies use computers to value cases. Adjusters punch in all sorts of data; location, medical bills, number of prior claims and God knows what else. From this they get values like; $11,463.47. There are whole CLE’s on this process and you need to have some understanding of it because this number, this process and those computers are part of the sauce that goes into figuring out the value of your case. If you want to increase the value of your claim, you have to either hit, with as much information the carrier values as you can, on as many of those data points as possible, or get your case outside that system. I prefer to be outside the system. I let adjusters know, as soon as I can, what makes a given case unique, why they should set a higher reserve than the computer suggests, what ingredients Colossus (one famed computerized adjuster) will overlook but a jury won’t; like that image or video or super likeable client.
If you don’t really try cases, all the way to verdict, your cases are not worthless, but are worth less, at least, from the view of the opposing side. They have to be. If the defense makes a “final and best” offer and you have no intention of trying the case, you have to take the offer, don’t you? If your threat of trial is just a threat, why would anyone pay more to you for your cases; you’ve already mitigated their risk? I also think that trying cases tells us what real people will do with the real situations we, monetizers of people’s tragedies professionals, are all just guessing at. For this point, though, you just need to know, are you really a trial lawyer? It’s not a value judgment, just a judgment on value. If you haven’t tried a case in years and are known as a “settler,” your cases have a lower value. Even if you haven’t had great verdicts, the willingness to try cases, increases the value of your cases because it raises the risk.
I don’t put much credence in Focus Groups, I think they only tell you what one group thinks in a given moment of time, not what your 12 jurors will think when it really counts. That said, a Focus Group can increase the value of a case. Remember, on cases with high value, the insurance company is “round tabling” the case. They have a bunch of their folks, sit around and guess, based on experience, computer models and other factors, what a jury will do. If you have video of a focus group, made from your jury pool, discussing your case and valuing it highly, you can demonstrate what, at least, one jury might do. Sharing such video is very powerful. Of course, if you can’t convince the focus group, you know you’ve set your mark too high.
Other verdicts and settlements in similar cases, those you’ve handled and those handled by others, are also ingredients you should consider. I don’t take this too much into account either because, as I’ve repeated, every case is different, but it matters. If no one has ever gotten $400,000 for a well healed broken leg with no permeance on a slip and fall, you probably won’t be the first. That was me, I was the first. How other cases have resolved tells us a lot, but make sure you look at the ingredients used to get those verdicts and settlements. Maybe your slip and fall really is different because you’ve got a great picture or match well with opposing counsel.
Don’t underestimate headlines as ingredients in your cases. If you don’t believe the “#metoo” movement has increased the value of sexual harassment cases, you are foolish. If the headlines everyday are dominated with stories about overdoses, your lawsuit against opioid manufacturers is more valuable than at another time when the headlines were dominated with other stories. I’m not suggesting you seek press, but, instead, pay attention to the temperature of the room. Juries read those stories and you should remind adjusters and defense counsel, as they value the case, about this ingredient.
More often than not, because of the scheduling headaches, you’ll have your client’s treaters testify on video. Make sure they bring demonstratives. If your treater is bland and tells a bland tale, your case value is lower. A treater who volunteers information about an injury’s pain is certainly better than one who must be asked. But a treater who brings a little show and tell to keep a jury watching, adds real value. This is true of your experts as well. Don’t rely on a phone call and email exchange. If you are thinking of hiring an expert far away, use video chat. Sure, credentials add some value, but the defense has an expert too and their guy has credentials. I’d rather have someone a jury will pay attention to and trust. Think your favorite high school teacher, the one you actually tried for because you didn’t want to disappoint. That type of expert adds value.
Because of ingredients like liens, subrogation claims, attorney fees and other costs, mathematically, there’s a baseline number below which your client receives nothing. This number is determinable and is the baseline minimum value for any case. It is also a moving target. If you’ve worked against me on a case, you’ll note that I will tell you that I can take some number today, but, once I hire an expert or undertake some other action, the price goes up. This all because as I’m processing the case, I’m measuring and calculating the bottom-line to my client. I look at value from a client perspective. If, after all the costs involved, some offer equates to zero or less, why wouldn’t we want to try that case? The client has, literally, nothing to lose. Good adjusters and defense lawyers appreciate knowing this number and having this information. I, don’t always, but often, share it. Because of this mathematical reality, settlement value and the number you ask for from a jury are two different things.
At the end of the day, these are only a few of the different ingredients that go into the value of your cases. Your drive and personality can add a lot as well. They can also take a lot away. In the end, though, Rebecca, David Nixon and I all hope you enjoyed these recipes.