What is My Case Worth and How is it Determined?
Sep 20, 2018 | Tom Teodori
If you’ve made it to this page, its probably because you, a family member or friend sustained injuries resulting from the negligence of a company or individual. According to the National Safety Council, motor vehicle crashes in the United States during 2017 resulted in 40,100 deaths and 4,500,000 seriously injured people. Those numbers are mindboggling—110 people die each day in a motor vehicle collision and more than 12,328 are injured daily. For teenagers, car crashes are the number one cause of death. Tragically, you have a 1 in 102 odds of dying in a car crash during your lifetime. Being struck as a pedestrian is 1 in 561 and for those riding motorcycles, the odds are 1 in 846. Slip and fall statistics are also alarming. You have a 1 in 119 odds of dying as a result of a fall. The above numbers are ridiculously high, and you can see the real life and close-to-home tragic consequences of such events.
Negligence is frequently the result of somebody’s violation of the safety rules which are designed to protect us and keep us safe. Some sort of distraction, lack of proper attention, inadequate training, not following protocols, taking short cuts and otherwise not doing what a reasonable person would do creates the negligent conduct. When that safety violation occurs, the negligent party has an obligation to make things right. The question is—what is right?
How much money is right? What factors are considered in valuing an injury claim?
Although some might think it unseemly to value injury claims in dollars, that is the only method our system of justice allows. The United States’ system of justice derived from the common law system developed in England. Although many changes and modifications were made following our Declaration of Independence in 1776, we still hold to the judicial system that requires a negligent wrongdoer to fully compensate an injured party for his or her losses. Failure to do so is a failure to do justice. We are very fortunate to have the system we do because a justice system used in other parts of the world dates back to around 1754 B.C. Known for Babylonia King Hammurabi, its called the Code of Hammurabi. You are likely familiar with this justice system based upon retribution, an eye for an eye and tooth for a tooth.
So, returning to your inquiry, what is a case worth? Numerous factors dramatically affect the value of an injury claim. Many will be discussed below, but some common factors include the defendant’s conduct, the injuries sustained, medical care, lost wages, permanent injury and where the injury occurred. Although you may have heard from a friend or family member about a formula for determining case value, that system or process really has not existed for decades. Insurance companies today use computers to determine case value. Experienced injury attorneys are aware of this and have the tools and resources to fight for fair compensation.
Are there any liability issues?
The first step in assessing proper case value is resolving any and all liability issues. Liability simply means who is at fault. Is the at fault party completely at fault, or only partially at fault? Is fault disputed? Depending on the state where the negligence occurred, fault is crucial. The District of Columbia, Maryland and Virginia are three of the five jurisdictions in the United States that follow the concept of contributory negligence. In most states, comparative negligence is the standard. Why is that important to case value? In contributory negligence states, if the injured person is even 1% at fault then he or she is not entitled to any money—nothing! A harsh result, but that’s the legal standard in contributory negligence jurisdictions. In most of the US, the standard is one of comparative negligence. In such states, a comparison is made between the negligence of the parties and the injured person’s money award is reduced by his/her comparative negligence. So in a contributory negligence jurisdiction, if the injured party is found 1% at fault for a car crash, there would be no recovery. However, if with same set of facts the car crash occurred in a comparative jurisdiction (Pennsylvania) and the jury awarded $100,000.00 to the injured person, the award would be reduced by the injured person’s negligence (1% = $1,000.00), so the award would total $99,000.00.
How does an insurance company evaluate the value of your case?
In the past, an insurance company adjuster would use his/her common sense, education, training and experience to determine case value. However, in the mid 1990s, the claims departments of most large insurance companies underwent a radical transformation based upon suggestions by McKinsey Consulting. The suggestions were designed to reduce the amounts insurance companies were paying to injury victims, thereby dramatically increasing profits. So currently, most insurance companies use computer software based upon potentially hundreds to thousands of different data points to determine case value. One such program is called Colossus, which was originally created by Computer Science Corporation and leased to hundreds of insurance companies. The human element in reviewing claims has been significantly reduced, and at times, all but eliminated. The insurance industry cost savings have been huge while payments to injury victims have been dramatically decreased.
So, if an insurance company is going to use computer software to reduce the value of a case, what can be done about it? First, it’s important to retain a law firm experienced in handling claims with insurance companies using the computer software. Accurate documentation of injuries, type of medical care, body parts, loss of enjoyment, medical procedure codes, supporting records, medical billing codes, permanent injuries, etc. are important when preparing settlement demands that will be assessed by the computer.
Second, it’s critical to retain a lawyer and a law firm with a well-earned reputation for going to court. Insurance companies track and record which law firms fight for their clients by filing suit and which lawyers are more likely to just take the money and run. If your lawyer has a reputation for settling, you will get less of an offer than another lawyer with a reputation for fighting for his/her client. Normally, settlement value increases after suit is filed and may continue to increase as you get closer to the actual trial date.
Third, be prepared for a fight and you must remain patient. If the insurance company makes you an unfairly low offer and suit is filed on your behalf, the insurance company may hold on to its money until very close to trial. Insurance companies understand that they have the money and it doesn’t make much difference whether they pay today or one year from now. It’s not going to have much, if any, impact on the large insurance company. Insurance companies make money over time on their money through investments, so the delay is normally nothing but beneficial for insurance companies. You, on the other hand, have lost time from work, received less than you thought for the value of your vehicle, incurred medical bills that threaten to turn you over to credit agencies, spent through your savings and now feel the need to settle your claim. The insurance company now has you at a disadvantage. Again, an experienced injury lawyer will assist you through this difficult process and help you see the light at the end of the tunnel.
Some of the factors to consider in assessing case value include:
- The defendant’s behavior – The more outrageous the negligent behavior, the better the case value.
- The defendant – Will the defendant make a good or bad witness?
- The amount of insurance coverage
- The type of negligence claim – Minor rear-end crash versus tractor trailer setting off chain reaction collision.
- What county suit could be filed in – Certain jurisdictions are more favorable and insurance companies are aware.
- The injuries sustained and their extent and duration – Muscle strains versus herniated discs, brain injuries, fractures
- How the injuries effect your overall physical and mental well being
- The physical pain and mental suffering in the past and expected in the future
- Scarring – Scar to the face worth more than scar on back
- Medical expenses in the past and expected in the future
- Loss of earning in the past and expected in the future
- Past and future pain, permanent impairment, loss of mobility, companionship, enjoyment of the things you enjoy
No two cases are the same, and even similar facts and injuries frequently lead to widely different outcomes. What may be relatively minor for one person may be devastating for another—how can a computer make that determination? The problem is, insurance companies rely upon them to perform that function thousands of times per day. There is no humanity in using a computer to determine the seriousness of an injury and how it impacts and changes a person’s life. For that, you need an experienced lawyer on your side, one the insurance company knows will file suit if a fair offer is not made. Even so, because of the use of Colossus or similar programs, the insurance adjuster doesn’t have the flexibility to go above the computer value, so the decision must be made—settle or sue?
Ultimately, your case is worth this— what you’re willing to accept in settlement and if not, then what you are awarded at trial. A skilled trial attorney should be able to give you a pretty good idea of the value range of your claim based upon their experience.
A lawyer should also explain the settle or sue options so that a decision in the client’s best interests can be made. If the case ultimately proceeds to trial, then the value will be determined by a jury using many of the twelve criteria listed above.