Cases Settle Because of Risk Assessments

—By John Merrick—

Both sides get a bad rap: “greedy personal injury lawyers file frivolous suits” and “greedy insurance companies deny (defend against) worthy claims”.

Neither one is true, but a few bad apples can ruin the whole bunch.

If it was true, then why do 95% of cases settle? And, of the remaining 5% that go to trial, the result in personal injury cases is close to 50/50.

Cases settle because of the calculated risk of an adverse result. The parties would rather have control over the result by way of settlement, than leave it in the hands of an (unpredictable) jury that could go 50/50.

If there is calculated risk, that means (1) the cases are not frivolous and (2) parts of the claim are defensible.

Both sides have a job to do. Litigation allows the parties to obtain the information they need to make a confident risk assessment. We have a great system, especially when the players are considerate of each other.

According to forbes.com:

“Personal injury lawsuits almost always end in settlements. According to the U.S. Department of Justice, only 4% to 5% of personal injury cases go all the way to trial.

A study conducted by the Bureau of Justice Statistics in 2005 found that:

• Of all the personal injury cases that went all the way to verdict, the success rate for plaintiffs was about 50%
• The highest success rate was in auto accident cases, at 61%
• Plaintiffs were only successful in 19% of medical malpractice trials”

https://www.forbes.com/advisor/legal/personal-injury/personal-injury-settlement-amounts/

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