Advanced Case-Valuation Techniques

The difference between knowing your case’s value and thinkingyou know your case’s value.

Glenn Koch, editor in chief, VerdictSearch

AdvancedCase-Valuation Techniques

Advanced Case-Valuation Techniques

During the course of a career, a successful plaintiffs’ attorney is likely to try hundreds of cases. That experience allows the attorney to quickly evaluate a case and estimate its strength and worth. So when it comes time to negotiate a settlement, the attorney is bargaining off of a rock-solid valuation of the case. … or maybe not.

In a statistical sense, plaintiffs’ attorneys are at a disadvantage in that they’re negotiating against claims adjusters who have the results of hundreds of thousands of settlements at their disposal. Insurers use proprietary data and data shared through insurance cooperatives to zero in on an exact dollar value for each case. In this white paper, we’ll present studies that will help plaintiffs’ attorneys use similar data to complement their wisdom and level the playing field. There is no substitute for wisdom, but we can use analytics to fine-tune wisdom.

Overview

Advanced Case-Valuation Techniques

Part One:Know Your Anatomy

Advanced Case-Valuation Techniques

When valuing the injury component of a case, plaintiffs’ attorneys may fall into the trap of thinking too broadly. Sure, an ankle fracture is a serious injury, but there is a big difference between a trimalleolar fracture and an avulsion fracture. A trimalleolar fracture is usually far more debilitating. You can bet that the claims adjuster isn’t going to present the same offer for both injuries. So if you’re valuing both injury types similarly, you’re off the mark.

Of course, that’s an obvious example. Read on for a more subtle scenario that has likely cost many plaintiffs’ attorneys a lot of money.

Know Your Anatomy

Advanced Case-Valuation Techniques

Back and neck woes are likely the most commonly cited injuries in personal-injury lawsuits. They’re ubiquitous to the point of being nearly interchangeable, as in “soft-tissue injuries of the back and neck.” But interchangeable they are not, at least in terms of the damages they merit. The accompanying chart, based on cases reported to VerdictSearch, compares the median recovery amounts for cases involving fusion of the neck (yellow bars), fusion of the back (green) and both (red). Obviously, recoveries are greatest when both the neck and back are fused, but most interesting is that back injuries are worth

Know Your Anatomy

30.4 percent more than neck injuries in settlements and 81.5 percent more in verdicts.

THE TAKEAWAY: NEVER compute a valuation based

on a diagnosis of “a herniated disc” or “a few bulging discs.” Consider

precisely which discs are involved, and consider the treatment.

Advanced Case-Valuation Techniques

The prior page’s narrative closed with the words “consider the treatment.” Indeed, the treatment is a better definer of the injury than the injury itself. For example, the accompanying chart, based on cases reported to VerdictSearch, depicts the median jury award for cases involving hip fractures, indicated by the left bar, and knee fractures, indicated by the right bar. The top edge of each bar indicates the median jury award in cases in which the fracture led to replacement of the hip or knee.

Know Your Anatomy

The top of the gold section indicates the median award in cases in which joint replacement did not occur.

THE TAKEAWAY: Replacement adds 18.4 percent to

the value of a hip fracture and a staggering 246 percent to the value

of a knee fracture!

Advanced Case-Valuation Techniques

Part Two:Know Your Foe

Advanced Case-Valuation Techniques

A case’s monetary value hinges on the plaintiff’s injury and treatment, the strength of the liability component, the venue and other factors, but then, of course, there is also the depth of the insurer’s pockets. The latter element is largely controlled by the terms of the relevant insurance policy, but, as discussed earlier, the claims adjuster will nevertheless negotiate off of whatever numerical value the adjuster’s data has set for the case. Basically speaking, an insurer pays a specific amount for a specific injury/treatment combination in a specific region, capped by the relevant policy’s limit.

In practice, there are other elements that affect an insurer’s valuation of a case.

Know Your Foe

Advanced Case-Valuation Techniques

Whether intentional or a matter of circumstances, insurers do not view male and female claimants similarly when computing a claim’s value. A plaintiffs’ attorney should tweak his or her case valuation based on this knowledge. The accompanying chart, based on median settlement values in motor-vehicle cases reported to VerdictSearch, shows that nearly all of the leading insurers are more generous when it comes to paying male claimants. Farmers, whose numbers are dead even, is the only insurer standing up for gender equality, while Geico’s bias of 21 percent is the largest of the group.

Know Your Foe

Note that Liberty Mutual, which also favors male claimants, was omitted because its median payouts are far greater than the chart’s scale would allow.

THE TAKEAWAY: Your client’s gender can affect his or

her recovery by as much as 21 percent.

Advanced Case-Valuation Techniques

Like gender, a plaintiff’s age affects an insurer’s valuation of a case. Some of this can be attributed to age’s link to earning power, but there is more to it than that. Ours is not to guess why but to demonstrate the difference. The accompanying chart, based on cases reported to VerdictSearch, depicts median settlement amounts in motor-vehicle cases, separated by insurer and the plaintiff’s age. Across the field, the largest settlements are given to plaintiffs 65 years of age and older, as represented by the purple bars. Generally, relatively large settlements go to plaintiffs younger than 20 years of age,

Know Your Foe

followed by a sharp decline for plaintiffs in their 20s and 30s, followed by an increase thereafter.

THE TAKEAWAY: In an insurer’s eyes, middle-age plaintiffs are less valuable than adolescent or elderly plaintiffs.

Advanced Case-Valuation Techniques

The final point about insurers is this: A little research can tell a lot about a claims adjuster’s mind set. Perhaps the best weapon at your disposal is a history of how insurers have settled cases similar to yours. Armed with such information, you can begin negotiating from an insurer’s limit, rather than letting the insurer bargain you down from your valuation. Consider the value of the accompanying chart, which is based on nationwide settlements involving knee tears requiring arthroscopic surgery, as reported to VerdictSearch. Each bar depicts a particular insurer’s range of settlements in these cases.

Know Your Foe

The diamond in the middle represents the median settlement amount for that particular insurer. Armed with this data, plaintiffs’ attorneys can easily detect when an adjuster is presenting a lowball offer.

THE TAKEAWAY: Know your foe!

Advanced Case-Valuation Techniques

• NEVER compute a valuation based on a diagnosis of “a herniated disc” or “a few bulging discs.” Consider precisely which discs are involved, and consider the treatment.

• Replacement adds 18.4 percent to the value of a hip fracture and a staggering 246 percent to the value of a knee fracture!

• Your client’s gender can affect his or her recovery by as much as 21 percent.• In an insurer’s eyes, middle-age plaintiffs are less valuable than adolescent or elderly

plaintiffs.• A little research can tell a lot about a claims adjuster’s mind set . Armed with this data,

plaintiffs’ attorneys can easily detect when an adjuster is presenting a lowball offer.

Summary

Advanced Case-Valuation Techniques

The studies presented here are just a few of the metrics on which case valuation should be based. Wisdom, experience and other intangibles are certainly important, but data is just as important. The right mix of those elements will help you get your client the largest possible settlement.

How to get more data? You don’t have to hack an insurer’s database. All of the studies were compiled using VerdictSearch.com’s powerful search platform. Go to VerdictSearch.com to get a free trial or call us at 1-800-445-6823. Let us get you on the way to better case valuation!

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Advanced Case-Valuation Techniques

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