Settling is More Lucrative than Trial

A recent law journal article implys that injured people who go to trial don't realize just how big of a gamble they are making when they decline a settlement offer. Citing a study in an edition of the Journal of Empirical Legal Studies found that settling is usually more lucrative than after trial.

The study looked at 2,054 cases that went to trial between 2002 and 2005. It found that 61 percent of the plaintiffs made the wrong decision to go to trial and ended up with a verdict that was less money than the settlement offer. On contrast, 24 percent of defendants were wrong to proceed to trial. Iin only 15 percent of the cases both plaintiffs and defendants made the right decision to go to trial. That meant the defendants paid out less than the plaintiff initially demanded but more than the defendant offered before trial.

Although plaintiffs are more likely to incorrectly choose to go to trial, defendants face the biggest financial risk in forgoing settlements. Of the cases where defendants incorrectly opted to go to trial, the average plaintiff settlement demand was $770,900 while the average verdict was $1.9 million. That means the defendants paid on average an additional $1.1 million.

By comparison, the plaintiffs saw an average loss of only $5,700.

Footnote: Source "Settling More Lucrative Than Going to Trial, Study Shows" by Karen Sloan, The National Law Journal, September 24, 2008

Jim Donelan handles motor vehicle accidents such as car accidents, truck accidents, and motorcycle accidents in the following Rhode Island areas: Barrington RI, Bristol RI, Burrillville RI, Central Falls RI, Charlestown RI, Coventry RI, Cranston RI, Cumberland RI, East Greenwich RI, East Providence RI, Exeter RI, Foster RI, Glocester RI, Hopkinton RI, Jamestown RI, Johnston RI, Lincoln RI, Little Compton RI, Middletown RI, Narragansett RI, New Shoreham RI and Block Island RI, Newport RI, North Kingstown RI, North Providence RI, North Smithfield RI, Pawtucket RI, Portsmouth RI, Providence RI, Richmond RI, Riverside RI, Scituate RI, South Kingtown RI, Tiverton RI, Wakefield RI, Warren RI, Warwick RI, West Greenwich RI, West Warwick RI, Westerly RI, Woonsocket RI, Kent County, Providence County, Washington County, and through out South County, Newport County, East Bay and West Bay.