Most cases settle without ever going to trial. That is because all parties have something to lose if a case is tried. Jury verdicts are not predictable. You can make educated guesses about the outcome, but nobody really knows for sure unless the case is tried. Any plaintiff’s case can result in a zero verdict, although the odds of that might be pretty poor in any given case. Likewise, the insurance company can get stuck with a verdict for far more than the insurer could have settled the case for.
However, there is a difference between you and the insurance company in terms of risk. Your case is the only case that you have and you may never have another. You may do really well or you may do really bad, as when the jury returns a zero verdict. Whatever the outcome, that is all that you are going to get.
On the other hand, insurance companies are in court all the time. If an insurance company gets hurt by a huge verdict in a plaintiff’s favor, there will be another case for the insurance company where it has an opportunity to get a real good verdict for itself.
In other words, the insurance company’s trial results can average out. Verdicts for individual plaintiffs do not average out for every plaintiff. Whatever verdict is returned will be the only verdict an individual plaintiff will get. So, the risk of trial is greater for plaintiffs. We used to say that plaintiffs did worse at trial than what they could settle for in four out of five cases, although I do not know if anyone ever actually kept score. What would make cases settle is that the insurance company would get burned on the fifth case, which would tend to erase some or all of the advantage that the insurance company had obtained on the other four cases. It is the odds that there will be a case on which the insurance company stands to get burned that causes a settlement in the other four cases.
The insurance company will settle to simply minimize the risk of real bad verdicts erasing all of their gains on cases where the insurance company has done very well. That is why they settle. Plaintiffs settle to avoid getting stuck with a disastrous verdict in the only case that they may ever have.
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