Communicating With Clients About Valuation Expectations
We have all been in a situation where a fair, equitable offer is extended by the other side and our client refuses to accept. The familiar responses—"I want my day in court," and, "I won't settle unless I walk away with X"—are predictable and all too common. Despite our efforts to educate our clients on the risks of rejecting a settlement and proceeding to trial, it can seem impossible to convince a stubborn client that he or she is making a poor decision.
Valuing a personal injury case is an arduous and uncertain task. Convincing a client that his or her case is worth significantly less than he or she believes is even more challenging. The majority of personal injury cases do not have enough value to retain a professional focus group.
Advising our clients when to settle and when to push forward is a frustrating process. The risk of trying a case is a gamble that many lawyers are reluctant to take, yet so many clients are eager to have the opportunity to present their case to a jury.
Deflating unrealistic expectations is one of the more challenging aspects of litigation. We all have our own individual strategies for advising a stubborn and unreasonable client.
Pennsylvania Rule of Professional Responsibility 1.2 says in part that "a lawyer shall abide by a client's decision whether to settle a matter." Of equal importance, lawyers also have the obligation to make sure that our clients are making a fully informed and educated decision when the time comes to discuss possible settlement.
Talk Value Early
Discussing the value of a case with a client early can be effective in tempering high expectations at an early stage. The conversation about case value may be premature if a client is still receiving ongoing medical treatment and the prognosis and need for future treatment are uncertain.
Many clients are aware of large verdicts from friends or media outlets and have a pre-existing perception, so they assume that every case is exponentially more valuable than it really is. There is often a perspective and predetermined mindset of personal injury plaintiffs that it is easy to get a high verdict at a jury trial. If you have tried cases, you know that the opposite is more often true.
Discuss Weaknesses and Present Risks
Unfavorable facts—such as an unfriendly county, minimal property damage, lack of objective findings on diagnostic testing, limited tort election, pre-existing injuries and minimal specials—should be discussed as early as possible. A client needs to understand how unfavorable facts could negatively influence a potential juror's view of the case at trial.
One of the most precarious risks of going to trial is an unfriendly county. The counties surrounding Philadelphia have generally been more defendant friendly in personal injury and medical malpractice cases. In 2012, there were 19 medical malpractice cases tried to verdict in Montgomery County. All 19 cases tried ended in a defense verdict, according to the Unified Judicial System of Pennsylvania's website. A client should be aware of statistics like those, and sharing personal experiences of trying cases in the respective county helps to educate a client on the potential for an unfavorable outcome.
Knowing the history of verdicts in a particular county is important. I always explain to a client that an insurance company looks at a case very differently than the client. The interest of a third-party insurance company is based on numbers. Insurance companies often do not care about the actual individual client and how his or her life was affected by a particular injury. Their computer systems consider factors such as the county, the diagnosis, the length of treatment and the age of the client. Insurance companies expect to lose at trial every so often. That risk is factored into their yearly accounting. A disabled individual cannot afford to lose a case at trial and potentially leave tens of thousands of dollars or more on the table.
Even if liability is perfect, many judges in the counties remind plaintiffs attorneys during settlement conferences that verdicts in the counties have been consistently declining. Further, many jurors are offended by a plaintiff's claim of injury because they are concerned about their own insurance rates, or because they might have the same injury as the plaintiff.
Empower Clients Through Communication
Lack of communication is the most common complaint made against attorneys. The daily schedule of a litigator is often so crowded that calling a client every few weeks to provide a case update seems impossible and is less of a priority than our other undertakings. A client is more likely to listen to and respect an attorney's recommendation regarding settlement if the attorney has been responsive to the client in the past. If a client has not received a phone call in several months and an offer is extended, an attorney should expect more reluctance from the client when a settlement is recommended.
We should remind our clients periodically of their exclusive right to accept or reject a settlement offer. An attorney cannot make a settlement decision for a client, and reminding the client of that power continues to build trust by empowering the client.
I always let the client know that I enjoy trying cases, but there is no worse outcome than rejecting a reasonable offer only to proceed to a jury verdict in favor of the other side. This is especially true on the plaintiffs side, when risking thousands of dollars will have a drastic impact on the client's life.
Survey Outside Perspectives
Depending on the size of your firm, holding a weekly attorney meeting can be extremely useful, especially for assisting in valuing cases. A roundtable discussion and secret ballot serve as an effective way for the case-handling attorney to reassure a client of the likely value of the case. Communicate to the client that you sought additional insight from other attorneys and relay the consensus.
The psychology of informing and educating a client about the real value of a case can only be learned through experience. Every client has different past experiences and pre-existing ideas about how the process of litigation works. Changing those pre-existing ideas and perceptions is one of the most challenging parts of our job, but also one of the most rewarding when a client chooses to settle and we know that we helped the client make the right decision.
Craig Robinson is an associate with Lundy Law who represents plaintiffs in personal injury actions. He is on the board of directors of Stop CAID Now, a nonprofit that raises awareness for childhood autoinflammatory diseases.