August 15, 2018
A Simple Recipe for Valuing a Personal Injury Case
By Kirk Simoneau
A number of years back, I was fortunate enough to receive a personal injury case referral from a well-respected, skilled 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.
The Main Ingredient
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 can 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 goes down. If your client hasn’t held a job for months, including before the injury, your value goes 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.
If favorable, I always try to impress upon my adjusters (and defense counsel) the impression I think my client 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. There are dangers to all of these approaches, but the point is simple: accentuate the positive, eliminate the negative 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.
Liability and Damages
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 ingredient is, arguably, the damages. First, ignore the idea that a case is worth some multiple of the damages; that’s just dumb. It lacks thought and creativity. Not a single juror in the world has any idea what a special damage is and why it should be part of a verdict. But, as you examine the medical specials, make sure all the treatment is related to your injury.
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. When valuing your case, know that some on the defense side will disagree. If you allege lost wages, be able to prove them with tax returns and employment records.
Beyond the specials and any obvious hedonic damages, get creative. For example, a deaf client 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 your client’s injury truly affects his or her life.
Image is Everything
An essential ingredient to every good case 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 case of a slip-and-fall on stairs 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.
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 and how they will be received by a jury. I’ve even advised that you do that yourself. I often do the same in my mediation summaries and settlement demands, but, of course, about the defendant. Be as thorough investigating the defendant as defense counsel is in investigating the plaintiff. Does the defendant have a criminal record? Admissible or not, it adds value. Divorced 16 times? You get the idea.
In regard to defense lawyers, the defense lawyer makes a huge difference in the value of any case. First, the defense lawyer will have a view of the case’s value, so why not ask? This is New Hampshire, where most of the defense bar are great people who want to work with you to resolve disputes. 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 other lawyers, it’s the opposite. As a result of simple math, whether you are settling or trying a case affects it’s value.
Third, the more open your defense counsel is to being 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.
Role of Insurance Companies
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 to do just that.
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 CLEs on this process and you need to have some understanding of it because this number 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, and what ingredients Colossus (one famed computerized adjuster) will overlook but a jury won’t: like that memorable image or a likeable client.
Other verdicts and settlements in similar cases 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 received $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.
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.
The Worth of a Case
If you don’t really try cases, all the way to verdict, your cases are not worthless, but are worth less, from the view of the opposing side. If the defense makes a “final and best” offer and you have no intention of trying the case, you would have to take the offer, wouldn’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 practitioners are just guessing at. For this point, you only 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.
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 often, but don’t always, 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 ingredients that go into the value of your cases. Your drive and personality can add — or take away — a lot as well. In the end, Rebecca, David Nixon and I all hope you enjoyed these recipes.
Kirk Simoneau is the managing director of Nixon, Vogelman, Slawsky & Simoneau P.A., having that role for the past 8 years. Additionally, Simoneau is an accomplished trial attorney who loves juries.