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How much does it cost to defend PI claims?

I'm ignorant on the cost of defending personal injury claims ginganinja05/16/17
You're right that it depends. First, what is your billable h ejs201705/17/17
Thanks for the info man! ginganinja05/17/17
I guess it really depends on the jurisdiction. I doubt that guyingorillasuit05/17/17
I absolutely agree. That's why I attempted to qualify my res ejs201705/18/17
I brought a case into my firm where we are advising and repr retard05/17/17
For auto accident cases, I'd say (1) 7,500 - 15,000 (2) jd4hire05/18/17
How often would that happen -- where the carrier would rathe ginganinja05/18/17
It happens all of the time, sadly. The last trial I had was ejs201705/19/17
What this does is affect client selection. If the carrier is guyingorillasuit05/19/17
Interesting. That hasn't been my experience. I have one clie ejs201705/19/17
Ditto on this. Just toss some $hite against the wall and se jd4hire05/19/17
This thread has given me a fascinating insight into the mind trickydick05/19/17
If your firm has the resources, then I see your point. A sma guyingorillasuit05/19/17
ginganinja (May 16, 2017 - 4:46 pm)

I'm ignorant on the cost of defending personal injury claims. How much money does an insurance company spend to litigate a personal injury case? Obviously it varies case-by-case, but I'm looking for ballpark ranges in typical cases. For example, how much might it cost in these cases:

(1) Contested small damages cases, not involving broken bones or severe injury, no expert witnesses, generic written discovery, 2-3 depositions, and the case settles before trial. I'm thinking a rear-end whiplash case involving only chiropractic treatment. Or a slip and fall case involving sprains and contusions.

(2) Contested medium damages cases, involving broken bones, orthopedic surgery, or other bad (but not permanent) injuries, with 1-2 experts on each side, depositions of the parties and key witnesses, thorough written discovery, and the case settles before trial. I'm thinking a trip-and-fall case requiring wrist surgery. Or back surgery case involving pre-existing conditions.

(3) Contested big damages cases, involving permanent injury or death, 2-3 experts on each side, extensive depos and written discovery, and the case settles before trial. I'm thinking a med mal death case. Or dram shop action involving serious injury / death.

(4) How do the costs change with trial?

Thanks for the help!

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ejs2017 (May 17, 2017 - 9:46 am)

You're right that it depends. First, what is your billable hour rate?

In my area of practice the going rate to defend these types of claims is in the $135.00/hr range. For (1) I'd ballpark it at around $6,500.00; for (2) $9,500.00 to $12,000.00, and; (3) $15,000 to $22,000.00 (or more depending upon how protracted the case becomes).

Add trial to the mix and you have to project trial prep and the number of days projected for trial which, depending on the case, can be anywhere from $3,000.00 to $9,500.00 and beyond.

The best way to gauge your costs is to put together a litigation budget which will give you a better idea of projected litigation costs.

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ginganinja (May 17, 2017 - 6:30 pm)

Thanks for the info man!

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guyingorillasuit (May 17, 2017 - 7:45 pm)

I guess it really depends on the jurisdiction. I doubt that in my jurisdiction an insurance defense firm could defend a big-ticket case for $22,000. I see costs bills over $200,000 in big ticket cases submitted by plaintiff's counsel (when they beat the 998 offer). That is costs alone, not fees.

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ejs2017 (May 18, 2017 - 9:44 am)

I absolutely agree. That's why I attempted to qualify my response to suggest that a bill can be higher - even much higher along the lines you suggest - given a particular case's complexity. I've definitely been involved with protracted catastrophic cases where the bills have exceeded six figures.

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retard (May 17, 2017 - 11:07 pm)

I brought a case into my firm where we are advising and representing related corporate entitities in an action involving multiple deaths and grievous bodily injuries. We are retained to deal with potential piercing issues and to observe the defense counsel. We aren't even halfway through depositions and the bill is around 60k.

I have no idea what the actual defense counsel has billed but I bet it's far in excess of our bill.

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jd4hire (May 18, 2017 - 10:51 am)

For auto accident cases, I'd say

(1) 7,500 - 15,000
(2) 15,000 - 25,000
(3) 25,000 - 150,000

So much of this is relative. A difficult plaintiff's attorney, difficult client, ridiculous motion practice, etc. can throw this ridiculously.

I used to do all auto accidents and I was blown away how often the carrier would willingly pay me to work a case up for twice the value of ultimate settlement on a soft tissue low impact rear-ender.

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ginganinja (May 18, 2017 - 7:03 pm)

How often would that happen -- where the carrier would rather pay more in litigation expenses than pay a settlement? Insurance company strategy (or negligence) is fascinating to me, hence the original question.

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ejs2017 (May 19, 2017 - 10:34 am)

It happens all of the time, sadly. The last trial I had was in a smaller case that could have settled for $20,000.00. My carrier only wanted to pay $15,000.00.

The adjuster on the file's attitude was that litigation costs and indemnity are different line items in the budget, the case wasn't worth a penny more than $15,000.00 by his estimation, and that "the company" - i.e., the adjuster - would rather spend money and time in trial to "send a message" to the plaintiff's bar than to give in to this particular attorney's settlement demand.

I managed to win and it's my client's risk but I always wonder whether this approach objectively ever is worth it. I don't know a single plaintiff's litigator - PI or commercial - who would refrain from filing suit in any but perhaps the most frivolous case because of the "message" that had been sent previously.

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guyingorillasuit (May 19, 2017 - 12:16 pm)

What this does is affect client selection. If the carrier is known to be someone litigious, like Mercury, then the type of client you would take against Mercury is different from a client you would take against AAA.

Against Mercury, you get a good client, and file suit without trying to settle pre-trial.

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ejs2017 (May 19, 2017 - 2:52 pm)

Interesting. That hasn't been my experience. I have one client that pretty much wants to try everything. I still see the same garbage from certain firms regardless of whether this particular client is the defendant.

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jd4hire (May 19, 2017 - 5:18 pm)

Ditto on this. Just toss some $hite against the wall and see what sticks. Same exact thing in med mal except the billing can be significantly more.

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trickydick (May 19, 2017 - 5:42 pm)

This thread has given me a fascinating insight into the mind of a defense attorney. I hear the same thing from them, their client will pay more to litigate than what it would cost to settle to send a message.

But our attitude is to fight on every case where the damages merit it. And in those cases we're told to fight for every penny. The carrier's litigious reputation only counts insofar as it gives us an idea of the posture we should assume when negotiations begin.

Do the carriers ever stop and ask themselves whether our attitudes send THEM a message? It doesn't feel like it. To the contrary, they don't seem to care. And neither do we.

Maybe an actuary out there has actually done the math on this. I don't know. It seems to me a lot more like pride than economics.

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guyingorillasuit (May 19, 2017 - 5:47 pm)

If your firm has the resources, then I see your point. A smaller firm probably doesn't have the manpower or the budget to fight Mercury over every $8,000 case. It's cheaper to just not take them against Mercury.

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