How Do You Determine How Much a Lawsuit Is Worth?


Quick Answer

Plaintiffs and their attorneys determine the value of lawsuits by totaling any related medical bills, lost wages, lost earning capacity, incidental expenses and requested compensation for pain and suffering, according to Nolo. Each component's value varies widely based on the circumstances of the case and the venue where it is filed. For example, in some jurisdictions, courts value medical expenses by the amount the provider bills, while in others, courts use the amount the provider accepts.

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Lost wages are claimed when plaintiffs are unable to work due to injuries caused by the defendant, explains Nolo. This is calculated by multiplying the amount of work the plaintiff misses by his wage rate. Lost earning capacity comes into play when a plaintiff's injuries prevent him from earning as much as he did prior to the injury. When this is established, defendants compensate plaintiffs through a lump sum payment or by paying for employment retraining. Incidental expenses are miscellaneous costs connected to the plaintiff's injuries, such as gas money to drive to doctors' appointments for treatment of the injury.

To determine settlement value, litigators must consider the probability of a successful outcome at trial, states attorney Phillip W. Thomas. Cases with a higher probability of success are more valuable. To determine this, divide the total damages by the probability of success. For example, a claim with $100,000 in damages and a 50 percent chance of success is valued at $50,000.

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