what is your case worth? - hoganlegal.com · 2. contents this is an interactive ebook. click and go...
TRANSCRIPT
WHAT IS YOUR CASE WORTH?
2.
CONTENTS
This is an interactive eBook. Click and go directly to whichever section interests you most.
We will break down each section on how you can answer yes or no in determining whether you have a case.
1. HOW WE ANALYZE THE VALUE OF A CASE . . . . . . . . . . . . . 3 ›
2. SCENARIOS IN WHICH TO VALUE A CASE . . . . . . . . . . . . . . 4 ›
3. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ›
4. DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ›
5. THE VALUE OF YOUR CASE AT TRIAL . . . . . . . . . . . . . . . . 11 ›
6. HOW AN INSURANCE COMPANY VALUES CASES FOR SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 14 ›
7. PUTTING IT ALL TOGETHER . . . . . . . . . . . . . . . . . . . . . . . 16 ›
3.
HOW WE DETERMINE THE VALUE OF A CASE
“What can I get for my case?” That’s a question we at Hogan & Hogan, are often asked – and an important one. We are lawyers, not doctors, and while we can’t make you feel better, we can be by your side to guide you and consult you through the processing your case. Overall, the value of a case is analyzed as illustrated on the right.
1Past Medical Bills
Past Lost Wages
Future Medical Expenses
Future Lost Earning
Pain and Suffering
Baseline Value
Percentage of Other Parties’ Negligence
Jury Value
.4 (Insurance company reduction for settling without Lawsuit)
VALUE OF A CASE
HO
W W
E AN
ALYZE TH
E VALU
E OF A
CA
SE
4.
There are two different scenarios in which to value a case. The first is a “settlement” value. This is the value of a case being settled by a claims adjuster before a lawsuit is filed.
The second is the value of a case in which a lawsuit has been filed with the expectation of a jury trial. In that case, a jury hears testimony and determines the value of your case.
However, both scenarios are intimately related in that the first scenario entails an insurance company’s best estimate of what a jury might value your case at, heavily discounted for what
the insurance company considers the benefit to you of quick and easy settlement. A pre-lawsuit settlement is essentially an insurance company’s best guess of what a jury would award at the end of trial (with a heavy discount built in). This is the exact same way we evaluate cases.
So, in order to answer the question “what is my case worth”, we start at the ending with the Verdict Form. Looking at the verdict form, the jury completes at the end of the case is how we at Hogan & Hogan analyze a claim’s value.
TWO SCENARIOS TO VALUE A CASE
2
SCEN
AR
IOS IN
WH
ICH
TO VA
LUE A
CA
SE
5.
THE PARTY BEING SUED MUST HAVE DONE SOMETHING WRONG IN ORDER TO BE LIABLE.
3
LIAB
ILITY
The first question in case valuation must always be “Was the Defendant negligent, and can any negligence be attributed to our client or any other third party?” If so, we must reduce the damage evaluation accordingly.
COMPAR ATIVE NEGLIGENCEDefendant % Plaintiff % Party %
6.
In Florida, unlike some other states, there is comparative negligence so that a jury can award a certain percentage of fault to the Defendant and a certain percentage to Plaintiff or a third party.
It looks like this: “State the percentage of any negligence, which was a legal cause of loss injury or damage to Plaintiff that you charge to. Total must be 100%.”
If a Jury eventually arrives at a damage evaluation of $100,000, but finds the Defendant only 50% at fault, then the Jury Award will be only $50,000. If the Jury finds the Defendant only 25% at fault, then the Jury Award would be only $25,000, and so on.
That being understood, what is the full value of a case?
In our day-to-day practice, the most common situation in which we see this is where we have a “he-said, she-said” accident.
For example, both our client and the other driver told the police that they had a green light and there are no other witnesses or video available to corroborate stories. In that situation, absent other factors, the claims adjuster will apportion 50% liability to each side. Therefore the settlement value of the case will be 50% of the “full” value.
7.
In a civil action, we always take the position that a Defendant (an at-fault driver, a store owner, a manufacturer of a dangerous drug) is always 100% responsible for ALL of the damages which come about for the negligence. In practice, the Florida Verdict Form places damages into three large categories: past losses, future losses, and suffering.
PAST LOSSESFUTURE LOSSESSUFFERING
DAMAGES ARE PLACED INTO THREE LARGE CATEGORIES
4
DA
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8.
DA
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GES
“What is the amount of any damages sustained for medical expenses and lost earnings or earning ability in the past?
This is what a Jury sees in its Verdict Form. These questions summarizes two areas of damages: medical expenses and lost earnings.
The first question is “what are our client’s medical expenses related to this accident?”
Our client’s medical expenses are all medical bills that are incurred due to the accident. Keep in mind that Florida Law does not punish
you for having health insurance, and we generally attempt to apply all of your medical bills to this area of damages, even if you have health insurance that pays for it.
In the context of a Florida auto accident, there will be a deduction for no-fault auto insurance payments but that is a little outside the scope of this discussion.
The second part of the Jury verdict is “lost earnings” in the past. This might be the most straightforward part of the analysis. If the injury caused our
client to lose time from work, the damages are how much they would have been paid for all the time they couldn’t work due to the injury.
So, if a Jury decides that our client incurred $10,000 in medical bills and lost $2,500 in wages because of the accident, they would write in $12,500 in this line and move onto the next.
PAST LOSSES
9.
“What is the present money value of any damages to be sustained by (name claimant) in the future,
a. for medical expenses? $ b. for lost earning ability? $
This Jury Verdict question asks, first, what medical expenses will our client reasonably incur in the future?
This can be an area of fight and is driven by medical evidence. Many of our clients, after an accident, have not had any major surgery, but are looking at the very real possibility of requiring surgery or some other form of treatment in the future.
When our 25 year old client hurts his lower back in an auto accident, but does not want to undergo an operation, what are the chances his condition will deteriorate as he ages? What happens when he turns 45 years old and he is in so much pain that he decides to have back surgery?
It is with that possibility in mind that we look to medical evidence and probability and place a dollar figure on “future medical expenses.” We ask for $50,000 now, for the surgery that we believe is likely to take place in the future.
The second part of this question is, what will our client’s loss of earnings be in the future? Ie. “Future lost earning ability.”
This is another highly contentious area in which we hire experts to review the facts of the case
and provide us opinions. If our expert tells us that our client, the 25 year old construction worker, will not be able to work in construction anymore, or will not be able to work in construction 10 years from now as he gets older, we place a dollar amount on that loss of earnings.
Loss of future earnings is very complicated but can be huge in a case. A 25 year old construction worker might be making $30 per hour, but if he is relegated to office work due to injury, he might only be able to make $15 per hour due to his educational background. With an anticipated 40 years left in the workforce, his future lost earnings are over a million dollars!
DA
MA
GES
FUTURE LOSSES
10.
“What is the total amount of (Defendant’s) damages for pain and suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect and loss of capacity for the enjoyment of life sustained in the past and to be sustained in the future? $
This Jury Verdict question is the final element of damages a Jury is asked to evaluate is “Pain and suffering.”
As you can see, the question asked of the Jury is very broad and can encompass a lot.
Pain and suffering obviously encompasses past and future pain that you may suffer from the
injury, but also includes other things that you might not think about.
We ask clients how the injury affects their everyday life. Are there activities that our client used to do that they can no longer do? Not being able to pick up your children anymore is definitely a type of suffering. Not being able to go hiking with your friends like you used to do is another form of suffering.
Pain and suffering is a difficult concept to wrap your head around, and we are generally looking for concrete examples that can be brought to a juries’ attention. We bring in family and friends to talk to the jury about how the injury has affected our client’s lives.
We expect that the pain and suffering award will be large. But it is extremely difficult to place a dollar figure on it. Literally, the Jury is given nothing much more to go on than the above paragraph. The old rule of thumb is to take the past medical expenses and multiply by 2 or 3 to arrive at a pain and suffering amount.
This rule has little validity in the modern practice. Instead, we must look at our client (how sympathetic is he or she), the Defendant (how egregious was its actions) and how has the injury affected our client’s life?
DA
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SUFFERING
11. 5
THE HEART OF THE MATTER – THE VALUE OF YOUR CASE AT TRIAL
THE VA
LUE O
F YOU
R C
ASE AT TR
IAL
Past Medical Bills
Past Lost Wages
Future Medical Expenses
Future Lost Earning
Pain and Suffering
Value
VALUE OF A CASE
12.
Let’s look at what we might consider a “typical” rear-end auto accident case with clear liability and a 35 year old client who has had moderate medical treatment and documented requirements for future medical treatment but no significant lost time for work or anticipated. This client still has a dull pain in his lower back and some difficulty sitting or driving for a long time. We would analyze his case as follows:
Past Medical Bills ($2,500) + Past Lost Wages ($0) + Future Medical Expenses ($250 per year for 40 years = $10,000) + Future Lost Earnings ($0) + Pain and Suffering (?) =
Depending on our analysis of our client and his appeal to the jury, we would give this client a range with a Jury Verdict of $25,000 - $50,000.
THE VA
LUE O
F YOU
R C
ASE AT TR
IAL
EXAMPLE A
13.
Although the number of possibilities are almost endless, the general analysis is fairly straightforward. However, the truth is that a small percentage of cases actually go to trial so perhaps the most important analysis is how insurance companies estimate a just verdict and discount a settlement amount.
THE VA
LUE O
F YOU
R C
ASE AT TR
IAL
Let’s look at a client who was in a bad accident with significant property damage and significant injuries. This client underwent therapy and a round of epidural injections in his neck in an attempt to relieve the pain.
He does not want to have any type of invasive surgery although his doctor is certain he will require surgery in the next 10 years. His job is sedentary so there is no opinion that he will lose earning capacity in the future. The main wrinkle with the case is that the other driver is claiming
that our driver is at least partially at-fault for the accident. We would analyze his case as follows:
Past Medical Bills ($15,000) + Past Lost Wages ($0) + Future Medical Expenses ($50,000) + Future Lost Earnings ($10,000) + Pain and Suffering (?) =
Depending on our analysis of our client and his appeal to the jury, we would give this client a range with a Jury Verdict of $75,000 - $225,000. However, due to the liability issue, we would reduce the anticipated verdict by whatever percentage we believe a Jury would find our own client at-fault.
EXAMPLE B
14. 6
An insurance company places a value on your case based upon an estimate of what a Jury might award you based upon the above analysis and sometimes what it will cost it to defend the lawsuit. Period.
HOW AN INSURANCE COMPANY VALUES YOUR CASE FOR SETTLEMENT
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MPA
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ASES FO
R SETTLEM
ENT
15.
However, an insurance company builds in a large discount because the insurance company knows that a large percentage of injury victims and even lawyers will not take a case all the way through to a jury trial. Insurance companies also know that it can delay jury trials and wear down claimants and lawyers by dragging out the process of getting to trial.
We have even had cases take four years to get to trial!
The other thing to keep in mind is that almost every insurance company now utilizes claims management software in order to have a uniform system of case analysis.
To a large extent, modern claims adjusting has become somewhat of a data input job. There are positives and negatives to this. On the positive side, we are able to configure our claims demand letter to the computer software to arrive at more predictable results.
On the negative side, it is more difficult for us to present cases with peculiar facts or circumstances to an insurance company and ask for more money than the computer otherwise allows for. Part of our job is to identify claims where we know from the beginning that the insurance company’s claims software will not place enough value on the claim and file a lawsuit sooner rather than later.
Above all, keep in mind that modern claims adjusting is meant to save the insurance company money. Insurance companies are businesses, and they utilize technology to save money and, part of that is paying as little as possible on each claim.
That being said, claims software is driven by objective factors and almost to a point, minimizes subjective factors. Claims software uses objective data in order to estimate what a jury might arrive at as the value of a claim.
It discounts or ignores anything said by the claimant or the claimant’s attorney.
That being said, it is almost impossible in the context of this E-book to explain claims software and adjuster analysis.
However, in our experience with thousands of claims, we believe that most insurance companies in Florida place a “top-dollar” on a case of approximately 30-50% of what we would expect a jury to return on a Jury Verdict Form as discussed above.
Again, this is due to the fact that most clients, and some attorneys, will agree to settle for those figures – knowing that the insurance company can delay and drag out the case.
HO
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N IN
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AN
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MPA
NY VA
LUES C
ASES FO
R SETTLEM
ENT
16.
Past Medical Bills
Past Lost Wages
Future Medical Expenses
Future Lost Earning
Pain and Suffering
Baseline Value
Percentage of Other Parties’ Negligence
Jury Value
.4 (Insurance company reduction for settling without Lawsuit)
VALUE OF A CASESo, now we arrive at the answer to the question: “What is the pre-suit settlement value of my case?” This is what most people are asking when they ask “What is my case worth?” The answer is illustrated on the right.
7
PUTTING IT ALL TOGETHER
PUTTIN
G IT A
LL TOG
ETHER
17.
LETS DO AN EXAMPLE
In this case let’s assume that our 45 year old client was sitting at a red light and was rear-ended and his car suffers moderate damage. He goes to a chiropractor and eventually has an MRI, which shows a herniated disc in his neck. He works in construction and has to take off 2 weeks of work after the accident. His doctor indicates he will likely have to come in a couple times a year for some follow-up therapy at a cost of $500 per year. Our client continues to have a sore neck, especially after working a long day. We believe he will make a relatively good witness, although he doesn’t have any compelling stories of how the accident has affected him.
Past Medical Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,000
Past Lost Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000 - 1 paycheck
Future Medical Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500 - $10,000/yr for 20 yrs
Future Lost Earning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0
Pain and Suffering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25,000
Baseline Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,000 at Jury Verdict
Percentage of Other Parties’ Negligence . . . . . . . . . . . . . . . . . . . . . . . . . 100% of rear end accident
Jury Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,000
.4 (Insurance company reduction for settling without Lawsuit)
Amount we would value the pre-suit settlement value . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,000
OUR EVALUATION OF THIS CASE
PUTTIN
G IT A
LL TOG
ETHER
18.
Our goal is educating you on the process to help you further understand how we can help you and to always recover the maximum amount allowable for you under the applicable policy of insurance. The maximum
If you have any questions or would like to speak with us in a free consultation, please do not hesitate to call us at 407 422 2188 or email us at [email protected].
THANK YOU FOR READING! OUR PASSION IS USING TECHNOLOGY TO MAKE YOUR CASE BETTER, FASTER AND STRONGER. REMEMBER, HOGAN & HOGAN IS THE SMART CHOICE.
This E-book is meant as a quick guide only, and you should not rely on this alone as legal guidance.
