Remembering TCPaul, 2016-2019

The personal injury industry

I finished reading the book Moneyball the other day. It was trickydick01/25/19
Isn't that the model of most large PI mills? Churning lots o thirdtierlaw01/25/19
The diminishing frequency of trials is a direct result of in trickydick01/26/19
You’re making a mistake. For the most part, you’re ri dingbat01/25/19
That’s not a particularly good example because I’m speci trickydick01/26/19
In my jurisdiction, most PI firms are settlement mills that tcpaul01/26/19
the legal community is pretty small, and you get a reputatio dingbat01/26/19
"I know for a fact that these mills settle for less than PI trickydick01/26/19
"It may be more profitable to settle a case for $10,000 toda guyingorillasuit01/26/19
Yes, GIGS, bigger numbers are larger than smaller numbers. H trickydick01/26/19
You cannot computerize litigation. In the PI world, insuranc guyingorillasuit01/26/19
The time value of money really isn't a factor, for multiple tcpaul01/27/19
I know it because I was the defense attorney settling cases tcpaul01/27/19
I’m arguing for a move away from reliance on purely anecdo trickydick01/28/19
Is it better to get referred real cases to try/litigate or a ambulancechaser201301/25/19
It would be better if all these mentioned economic inefficie mtbislife01/26/19
10,000 cases that settle for $5,000 in attorneys' fees are w trickydick01/26/19
Ideally you want a mix of both. But you won't get settlement 2breedbares01/26/19
My theory is that it's not the actual trying of cases but th trickydick01/26/19
Focus groups and surveys provide this data to a degree. jd4hire01/28/19
As a plaintiff's lawyer, I think the worst thing you could d parlance01/27/19
Tricky - I think you're really underestimating a large swath tcpaul01/27/19
Different models can yield varying degrees of success. I wo jd4hire01/28/19
You can try to reduce case valuation to a perfectly mathemat jeffm01/28/19
I say raise small claims jurisdiction to like 50k or somethi onehell01/28/19
This would be great. It would be a nice forum for younger a jd4hire01/28/19
Absolutely. There really is a bit of a "brain drain" going o onehell01/29/19
That would definitely move things along more quickly. trickydick01/28/19
As regards general personal injury, having a preliminary hea jeffm01/28/19
MA has a med-mal tribunal that is convened prior to or immed jd4hire01/29/19
I am well-acquainted with the whole two-trial-temp-order thi onehell01/29/19
"For example, if the issue is wrongful death then obviously jeffm01/29/19
That's a defense on the merits which is not at issue. The on onehell01/30/19
I don’t claim it’s possible or even advisable to attempt trickydick01/28/19
This is pretty much correct, and I think you have spotted ju jeffm01/28/19
tricky, what you are proposing is something along the lines jeffm01/28/19
That’s completely wrong. What I am doing is equivalent to trickydick01/28/19
tl; dr, but in your PI hypothetical, let's say it was a car jeffm01/28/19
Jeff, I don’t understand why you’re being so fatuous. If trickydick01/28/19
Why do you assume the pigeon isn't an important factor? Lif jeffm01/29/19
Jeffm isn't being fatuous. He's right. You can't algorithmi onehell01/30/19
My mom served on a jury and said she strong-armed the rest o jd4hire01/30/19
“You can't algorithmically predict what a jury will do. Yo trickydick01/30/19
I doubt you were being ignored. My hunch is that all the fa jeffm01/31/19
I haven’t seen any indication that plaintiffs’ attorneys trickydick01/31/19
I understand, but that "gut feeling" you describe really com jeffm01/31/19
I’m not talking about predicting trial results. I never ar trickydick01/31/19
OK gotcha. But just to throw this out there, consider the fa onehell01/31/19
That’s the critical problem I recognized when I first cons trickydick01/31/19
Tricky is correct in the inefficiency regard. I am writi ambulancechaser201301/31/19
(medicals + disfigurement) * 1.5 + 1.25 * ego = value jeffm01/31/19
easiest way to put efficiency and objectivity in this indus bobm01/31/19
There are some pretty serious injuries which do not require jeffm01/31/19
a) A quick death from an accident is unlikely to convince of bobm02/01/19
Amputation. Had one. Medicals only $20k. Case worth many jeffm02/01/19
Permanency got it. Obviously that’s a good contingent for bobm02/01/19
Wrongful death cases are brought by the family members left onehell02/01/19
One hell the damages for lost consortium and support in a de bobm02/01/19
My state is different bout that. Back when I litigated, long onehell02/01/19
Interesting. If the jury does not categorize damages, then jeffm02/01/19
It’s instructive to examine the California workers’ comp trickydick02/02/19
interesting trickydick bobm02/03/19

trickydick (Jan 25, 2019 - 7:29 pm)

I finished reading the book Moneyball the other day. It was a real eye opener. The book itself explores how the Oakland A’s went from being one of the poorest teams in major league baseball to being a frequent World Series contender. But what the book was really about was how businessmen used statistical analysis to isolate economic inefficiencies in an industry filled with them, then leveraged that knowledge to maximize their own gains and reduce their losses.

PI is a business full of nothing but economic inefficiencies. The profit to be made by isolating the inefficiencies inherent to litigation and circumventing them is potentially massive. And here’s the biggest and most important conclusion I’ve drawn from years of practicing tort law: trials are a waste of money. You get rich by avoiding trial, not going to trial.

I wouldn’t recommend reading Moneyball unless you have a genuine interest in baseball. But the business lessons contained in the book are valuable. The author was one of the guys who made a killing on Wall Street in the 80’s using statistical analysis, he was also the writer of The Big Short.

I don’t have the statistical data to support my conclusions and given the nature of personal injury practice, it may not be possible to obtain this data through conventional methods. But this is my thesis: a firm that settles many small cases within a few months will make a greater profit than a firm that litigates several high value cases over the course of years, and the profit differential will increase with the length of the period of time reviewed.

It’s too bad lawyers are lazy and incompetent, because there’s some real money to be made in this, I think, for the guy that can take this line of thinking and apply it practically.

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thirdtierlaw (Jan 25, 2019 - 7:52 pm)

Isn't that the model of most large PI mills? Churning lots of low end PI cases as quickly as possible?

The most successful PI attorney I know typically has 1-3 massive cases and then a lot of fender benders/slip and fall cases, that his associates handle.

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trickydick (Jan 26, 2019 - 3:48 pm)

The diminishing frequency of trials is a direct result of insurance carriers gathering and analyzing statistical data to more accurately gauge the value of claims.

But the decision on the part of plaintiffs’ attorneys to decrease the frequency with which they go to trial is more the result of necessity than a calculated decision. Most plaintiff attorneys simply cannot afford the time and expense of trial so they avoid it.

While I sense that younger attorneys are focusing more and more on value driving factors in their cases, I’m not aware of any movement by plaintiff attorneys to take an analytical approach to their cases. Too much time is wasted on a regular basis sending boilerplate letters that never get read, making phone calls arguing or pleading for more money to settle a case, and on making threats to file unnecessary motions. Bluster and posturing pervade the industry.

There are many attorneys who recognize that they may be able to get another $5,000 or $10,000 or $20,000 on their case if they file a complaint and litigate the case, but there are few if any who rely on any sort of objective data or analytical approach to determine whether the resulting increase in the value of their case would be worth the additional time and costs incurred by the decision. Such decisions are made by relying on their own subjective experience or at best the anecdotal evidence supplied by other attorneys at conventions and in newsletters.

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dingbat (Jan 25, 2019 - 7:56 pm)

You’re making a mistake.

For the most part, you’re right. Litigation takes a lot of time and yhe outcome is uncertain. It’s often better to setyle - especially for small cases.

But, when e.g. apple and Samsung are suing each other for a billion dollars, it’s worth the risk of going to trial for the companies, and it’s soare no expense for the lawyer, who can bill stupid money for their services

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trickydick (Jan 26, 2019 - 5:14 pm)

That’s not a particularly good example because I’m specifically referring to personal injury litigation which is a completely different world from business litigation, which I believe to be controlled by more traditional economic principles. The concept of effecient breach, for example, wherein it may be more profitable for an economic actor to break a contract and risk being sued or paying a settlement than it would be to abide by the terms of the contract has no counterpart in personal injury. Lawsuits over commercial transactions might actually be beneficial to society if they result in greater market efficiency. Personal injury litigation doesn’t benefit society, we could only gain in this area if we eleminated the injuries that give rise to personal injury cases.

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tcpaul (Jan 26, 2019 - 9:47 am)

In my jurisdiction, most PI firms are settlement mills that never try anything. Having been on the defense side of things, I know for a fact that these mills settle for less than PI firms that take cases to trial. I had insurance adjustors that would throw $20k on a zero liability case to make it go away because they knew the other side would try it and it was cheaper to pay the settlement than to try it and win it. Settlement mills that didn't try cases were not given these same offers. Now that I'm on the PI side of things, I've noticed that I'm getting higher offers now that I've tried some cases.

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dingbat (Jan 26, 2019 - 3:45 pm)

the legal community is pretty small, and you get a reputation soon enough.
Regardless of what type of practice you do, if you don't ever take cases to trial, you'll always get screwed

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trickydick (Jan 26, 2019 - 5:49 pm)

"I know for a fact that these mills settle for less than PI firms that take cases to trial."

How do you know that?

That question gets to the heart of my argument. I began practicing in a personal injury firm that held to the conventional wisdom that you maximize settlements by going to trial or at least being willing to go to trial. The philosophy that you had to make life as difficult as possible for insurance carriers was deeply held. The attorneys who ran the firm took pride in the fact that they held a reputation for fighting for their cases.

But in the time I was there I was shocked by the inefficiencies inherent to a typical PI firm. First of all, no one stopped to take the time value of money into account and ask whether it made more economic sense to settle a case for $10,000 prior to litigation than it did to file a lawsuit to possibly settle the case two to three years later for $25,000 after incurring additional costs. There were other gross inefficiencies I noticed. Unnecessary motions were frequently filed or threats to file them were made, completely redundant depositions were taken, client expectations were poorly managed, lien based medical care raised serious questions about case valuation. Overall, the industry seemed filled with what I believed were economic inefficiencies. Time and money were being wasted.

Moreover, plaintiffs' attorneys would gather together at conferences and conventions to share their collective wisdom, but nearly everything was based on anecdotal evidence. Attorneys would point out that carriers paid more when their clients went to emergency rooms the same day they were injured, carriers would put more value on reports from orthopedists than from chiropractors, insurance-paid medical bills were more valuable than lien-based bills, etc. And of course they all said that the real money is in litigation and emphasized the power of personality and the importance of psychology in maximizing the value of cases. "You've got to have guts and you need to be tough, kid."

The problem with all this was that none of them ever had any objective data to support their arguments beyond anecdotal experience. To the extent any large body of statistical data was available, it had been taken from insurance carriers by one means or another. There was no analytical framework to determine what factors were actually driving up the value of a case. There was just the same old assurances that to be taken seriously, you had to be willing to try a case.

I don't doubt that you need to be willing to try a case. But I think the difference between the revenues obtained by firms that try cases and those that do not is not explained away by an unquantifiable and abstract concept like "reputation." Whatever your personal experience may have been with an adjuster, carriers do not value their cases by how tough they think the other guy might be. On a statistical scale taking hundreds of thousands of cases under review, your individual reputation in your local community is an irrelevant factor.

Just the same way that baseball managers used to look at factors like how well a prospect fields, how quickly they sprint, and how much power they have at bat, I think PI attorneys are valuing the wrong factors in assessing cases. In baseball, sabremetics has come to prove that metrics like on base percentage are better at estimating the future performance of a player than batting averages. What PI attorneys need to do is gather a body of statistical data, analyze it, and determine what factors maximize the value of a case while minimizing the losses incurred. It may be more profitable to settle a case for $10,000 today than it would be to settle it for $25,000 in three years.

I don't think it's trying cases that increases your settlement value. I think it's specific factors that occur when properly preparing a case for trial that drive up the value of a case. Find those factors, focus on them, apply them, and I think the personal injury industry can be revolutionized.

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guyingorillasuit (Jan 26, 2019 - 6:05 pm)

"It may be more profitable to settle a case for $10,000 today than it would be to settle it for $25,000 in three years."

For who? For the firm, 40% of $25,000 is much more than 33% of $10,000. The 40% is greater than 33% because you are closer to trial, and most attorneys' contingency goes up the closer you get to trial. If you multiply the difference between $10,000 in attorney fees and $3,333 in attorney fees by 300 cases per year, you get about $2MM - a comfortable margin for a firm of 5-6 associates or so, and 2-3 partners. The associates will be paid peanuts in "bonuses" on the $2MM, and the staff will get nothing. The partners will take home the bulk of that money, and that is why they get up in the morning and go to work.

For the client, the recovery may be the same or smaller, but I doubt most PI firms care about that.

You are not heaping enough blame on the adjusters, who will absolutely and without question extract the smallest possible settlement out of an inexperienced and trial-shy solo. If they offered at least 75% of their courthouse-steps value right away, this industry would indeed be revolutionized overnight. As long as you have to hold the trial gun to their heads to get anything close to full value, this is the way this has to be done.

Or, make it like Europe - implement single payer, make a law where the insurance companies don't have to pay the government, and you'll have little of the PI industry left.

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trickydick (Jan 26, 2019 - 6:45 pm)

Yes, GIGS, bigger numbers are larger than smaller numbers. Here's a link that explains what I was referring to when I referenced the time value of money:

https://en.wikipedia.org/wiki/Time_value_of_money

As far as I know, no one has developed a model to assess whether the cost of the additional time and expense incurred by filing a complaint is worth the ultimate increase in the value of the case which results from that decision.

You feel that three years of additional time litigating a case is worthwhile if you drive the case up from a value of $10,000 to $25,000.

Are those three years still worth it if the difference is from $10,000 to $20,000? From $10,000 to $11,500? What if there was a 15% chance that three years later the case might actually drop in value to $8,500?

I've spent my nascent career listening to attorneys bemoan the fact that opponents don't immediately give them what they ask for as soon as they ask for it. What I have yet to see are plaintiffs' attorneys systematically analyze the factors that determine the value of their cases based on a large body of data that has been carefully reviewed. What I have seen is a lot of time, money, and energy wasted in litigation.

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guyingorillasuit (Jan 26, 2019 - 7:44 pm)

You cannot computerize litigation. In the PI world, insurance companies have already tried to do that - it's called Colossus. Litigation is a world of human factors, where vanity, greed, lies, and and complex human relationships often prevail over what really counts. I don't think it's unique to PI. I think it comes from the fact that we are an individualist, non-conformist society with tenuous ties to each other, who developed complex rules to resolve our disputes. These complex rules are better than the way we solved disputes in the Wild West. A lot of litigation abuse happens because attorneys take advantage of these complex rules to lie, to harass, and to delay.

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tcpaul (Jan 27, 2019 - 6:55 pm)

The time value of money really isn't a factor, for multiple reasons. First, the time horizon of a case is too short. Second, try explaining the concept of present discount value to clients. Good luck!

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tcpaul (Jan 27, 2019 - 6:49 pm)

I know it because I was the defense attorney settling cases more cheaply with mills that didn't try cases.

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trickydick (Jan 28, 2019 - 2:17 pm)

I’m arguing for a move away from reliance on purely anecdotal evidence.

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ambulancechaser2013 (Jan 25, 2019 - 7:57 pm)

Is it better to get referred real cases to try/litigate or advertise for your Kleenex (soft tissue) volume files. That’s the question.

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mtbislife (Jan 26, 2019 - 12:45 pm)

It would be better if all these mentioned economic inefficiences were repaired and PI attorneys were not needed for minor fender benders and trip and fall nonsense.

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trickydick (Jan 26, 2019 - 7:05 pm)

10,000 cases that settle for $5,000 in attorneys' fees are worth as much as 100 cases that each settle for $500,000 in attorneys' fees, so as long as you do one or the other you will achieve the same result.

The real question is which approach is, statistically speaking, more likely to result in less expense in terms of time and money and therefore greater net revenue. By necessity, most attorneys acquire a mix of cases varying wildly in potential value.

It would be great if we had a system based on actual data to determine the best way to maximize economic gains while decreasing losses. Instead we have conferences on reptile theory.

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2breedbares (Jan 26, 2019 - 4:29 pm)

Ideally you want a mix of both. But you won't get settlements unless you have a reputation for willing to go to trial. I think insurance companies even have settlement authorities depending on who plaintiff's counsel is. Guys like Nick Rowley also make a living trying cases and do better than top level mills.

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trickydick (Jan 26, 2019 - 7:12 pm)

My theory is that it's not the actual trying of cases but the actions taken to prepare a case for trial that maximize gains.

To be clear, I believe that fundamentally you can never predict trial outcomes. There are too many variables. All you can do is determine the statistically likeliest range of a potential verdict and compare that to whatever metrics you decide to use to determine the value of the case. If there is a high probability that the lowest possible verdict you will obtain is higher than the last offer made on the case, then you should probably try the case.

My problem is that I am not aware of any system utilized to make these determinations based on existing data. There's just your gut instinct.

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jd4hire (Jan 28, 2019 - 9:09 am)

Focus groups and surveys provide this data to a degree.

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parlance (Jan 27, 2019 - 10:51 am)

As a plaintiff's lawyer, I think the worst thing you could do is be completely unversed in the dynamics of a trial and jury selection. The reason for this is simple.

You should be armed with this knowledge for the day when a client is adamantly not satisfied with the carrier's final offer, and the carrier will not budge and it is thereby incumbent upon you to proceed to try the case. Most of the time this won't happen and you'll get your money without too much of a struggle. Settlement negotiations sometimes have a phoenix-like quality of dying and then resurrecting. Some cases will settle after juries are chosen or right after closing arguments. It does happen.

But when that day comes, as it eventually must, you as the plaintiff's lawyer should be prepared.

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tcpaul (Jan 27, 2019 - 7:13 pm)

Tricky - I think you're really underestimating a large swath of PI attorneys. My firm keeps every metric imagineable, from time on desk to % increase in fees created by settling pre-suit vs. filing suit. But even with these metrics, the truth is cases can't be quantified so easily. Every adjustor and attorney in the other side value cases differently. And what may be a high value case in the hands of one PI attorney is low value case in the hands of another. Not to mention that seemingly low value cases often explode in value.

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jd4hire (Jan 28, 2019 - 9:08 am)

Different models can yield varying degrees of success. I work at a high-value PI firm. We get full value settlements (often significant policy limits) because (in addition to a strong case and high damages), the carrier and defense counsel know our firm and know that we (or my boss) will take the case to trial and win. They're the cases with eight-digit verdicts. Pulling down eight digit settlements happens when you have a proven track record of taking tough cases and pummeling the defense.

In my jx, we've had a string of very large plaintiff verdicts. I frankly am of the opinion that juries value the right cases much higher than the defense attorneys, the adjusters and their managers, and even plaintiff's counsel.

Having jury trial experience and not being afraid to flex it increases the value of your settlements, IMO. From my experience as Field Legal Counsel with a carrier, the offers almost always increase as trial approaches. There are specific steps in my jx where a carrier will regularly increase reserves (although the last offer was represented as "last and best").

As George Bluth once said, "there's always money in the banana stand." Banana stand being the carrier.

It's all cost benefit analysis as well. If going to trial adds 30k (in time lost and expenses) and the expected benefit is an additional 150k (so 50k in fees to you), then the trial is worth it. If expected benefit is 30k (10k to you), then it's not.

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jeffm (Jan 28, 2019 - 9:17 am)

You can try to reduce case valuation to a perfectly mathematical algorithm, but you will be wrong a lot. Juries render verdicts with their emotions, and you can't reduce emotions to equations.

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onehell (Jan 28, 2019 - 2:35 pm)

I say raise small claims jurisdiction to like 50k or something. Small/solo Plaintiff firms can't get buried in boilerplate discovery and carriers know what the maximum exposure from trial is likely to be. Or you could do such smaller matters in an admin forum like we already do with workers comp.

Getting out of the limited-jurisdiction forums and into "real court" would require a preliminary showing that you really could be entitled to big $$ if you win. No more unpredictable "anything the jury might determine" type claims. Soft tissue injury for a guy with no job? The only thing there's going to be is a complaint, an answer and a brief bench trial.

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jd4hire (Jan 28, 2019 - 2:53 pm)

This would be great. It would be a nice forum for younger attorneys to work on courtroom advocacy.

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onehell (Jan 29, 2019 - 12:13 pm)

Absolutely. There really is a bit of a "brain drain" going on right now in our profession. Trials are much more rare than they once were now that most stuff gets settled/arbitrated/plea bargained. But what we forget, in the courts' neverending quest to control caseloads, is that trials also didn't used to take as long and weren't preceded by such a lengthy and expensive discovery process.

True trial lawyers are a graying population it seems and over time, there will be fewer and fewer of them.

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trickydick (Jan 28, 2019 - 4:10 pm)

That would definitely move things along more quickly.

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jeffm (Jan 28, 2019 - 5:38 pm)

As regards general personal injury, having a preliminary hearing to convince a fact-finder that a request for $150,000 is legally justified is basically the same as having 2 trials. It's already hard enough as it is. Making 2 trials out of it would suck.

Family lawyers have to deal with this all the time in custody disputes. 1 trial for temporary orders and another for the final.

Texas has Rule 190, which doesn't attempt to limit a party's right to plead for relief. However, it does streamline discovery in smaller civil and family cases. It's a pretty good approach. People actually use it. Not everyone pleads high damages for the heck of it. If they plead high, that means you can hit them with big discovery, which they don't want to have to do in small cases. http://benchbook.texaschildrenscommission.gov/library_item/gov.tx.courts.r_civ_p/207

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jd4hire (Jan 29, 2019 - 8:57 am)

MA has a med-mal tribunal that is convened prior to or immediately after filing suit. I'm not involved in crummy claims, but I know some get tossed after that. To move forward, the Plaintiff has to file a bond.

I don't the point would be to justify above a certain damages threshold, but on cases where Plaintiff's counsel recognizes the case is less than X, move to an expedited process where you get a bench trial, shortened/ standard discovery and X amount of depositions. It would be a great mechanism for claims where less than 100,000 is at issue. To remove the subjectivity of case valuations, you could do it based on medical expenses.

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onehell (Jan 29, 2019 - 10:58 am)

I am well-acquainted with the whole two-trial-temp-order thing, but I don't necessarily think it's a negative. When I did family law, the mini-trial gave both sides a pretty good sense of which way the wind was blowing and often prompted settlement.

And the mini trials don't have to be all that expensive or time consuming. The only issue would be whether damages are reasonably likely to exceed the small claims cap in the event of a plaintiff verdict, and presumably the rules of evidence would be relaxed or nonapplicable in the mini-trial just as they would be in the small claims or admin forum that case would be heard in otherwise.

There could also be rules adopted to guide the mini-trial decision or exempt some cases from it. For example, if the issue is wrongful death then obviously it's going to real court. But if they weren't killed or crippled, then whether it's going to real court is going to depend on damages which aren't going to be much if the person didn't miss work or didn't have work to miss. Emotional distress damages could be capped at greater of X or a multiplier of economic damages to further streamline the determination.

Added advantage is, it's all prolly something the tort reformers could get behind. And while I'm normally opposed to tort reform, this type of thing would benefit plaintiffs too, due to the quick judgments in the smaller cases. Indeed, the major problem with tort reform advocates is they just want to cap verdicts without any regard to how long it takes or how much it costs to bring cases that far. So just capping damages effectively closes courthouse doors by making smaller cases not worth taking. But if instead of closing the doors to court you get the smaller cases to trial rapidly and inexpensively, everyone wins.

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jeffm (Jan 29, 2019 - 6:01 pm)

"For example, if the issue is wrongful death then obviously it's going to real court."

How do you know? Maybe the death was self-inflicted (at least, so says the Defendant, who claims he can prove it).

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onehell (Jan 30, 2019 - 11:20 am)

That's a defense on the merits which is not at issue. The only issue in this hypothetical approach is whether it stays in the limited-jurisdiction forum, where the only question is whether, if you win, the damages would likely exceed the limited jurisdiction cap, which a human life always would.

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trickydick (Jan 28, 2019 - 3:56 pm)

I don’t claim it’s possible or even advisable to attempt to predict the outcome of jury trials. One of the key concessions statistical analysts regularly make is that you cannot account for the human element in studying trends. You can’t adequately factor for irrational decisions people make based on emotion or bias or subjective perception.

I’m also not saying trial should be avoided at all costs.

What I am saying is that trial is so inherently unpredictable in terms of valuing a case that the goal should be to value cases independent of reference to trial outcomes.

There appears to be sufficient evidence to infer that certain factors in a given case (including actions taken in anticipation of preparing a case for trial) drive up the perceived value of a case. To some degree, I think, younger attorneys have focused on these factors and tried to utilize them systemically. But as far as I know, no one has attempted to quantify these factors in an attempt to determine how they can be utilized to maximize gains and minimize losses in a reliable way. Insurance carriers have attempted to quantify metrics to value a case objectively (e.g., colossus), to my knowledge no similar effort has been made by plaintiffs’ attorneys.

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jeffm (Jan 28, 2019 - 5:51 pm)

This is pretty much correct, and I think you have spotted just one of the factors that seem to correlate to value - and that is, the amount of discovery and motion practice.

Nobody is going to agree to go to a computer to tell them the value of their case. There are simply far too many subjective factors which come into play. For example, "How likable is the Plaintiff?" We all know there is great value added when your plaintiff is likable. There are countless soft factors that come into play that would never be part of a jury question or instruction.

As far as the amount of time it takes to work-up a case, experienced lawyers pretty much know what to do. When the case is serious or complex, they put more effort into it.

Many experienced litigators have seen cases where the discovery requests are way out of line in proportion to the seriousness of the case. It's pretty easy to spot. Then, you object. Then, if OC really thinks he has to get the information, he can try to compel answers by setting a hearing. Very few people want to compel responses to frivolous requests out of fear of how the judge might react, so it all kind of works out for the most part.

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jeffm (Jan 28, 2019 - 5:59 pm)

tricky, what you are proposing is something along the lines of taking a look at successful baseball players and finding statistics which any person could employ to become just as good. For example, the type and amount of exercise, food, sleep, sex, alcohol, drugs, age, weight, children, etc. All these things factor into everyone's lives, but not all people react the same way to them. Marriage is great for some people, and rotten for others. Some people do well on less sleep than others.

Everyone looks for a formula. At best, all I think you can find are a number of correlations.

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trickydick (Jan 28, 2019 - 6:44 pm)

That’s completely wrong. What I am doing is equivalent to trying to look at the stats for a professional athlete and determine which of those past stats best predicts their future performance, recognizing that it is impossible to ever predict anything with 100% perfect accuracy.

Let me put it to you like this. An attorney has a case with $12,000 in medical bills. There is an emergency room bill paid by insurance, then some chiropractic treatment, x-rays, and a consult with an orthopedist all on a lien. The attorney sends the medicals to the carrier with a demand for policy limits of $100,000.

The carrier evaluates the medical treatment and adjusts the medical bills using relevant information concerning the cost of similar medical treatment to arrive at what is considered a fair market valuation of the case. Various other metrics including the claimant’s age, gender, etc. and whatever other factors are considered relevant are plugged in to generate a settlement offer of $8,000.00. It’s debatable whether or not this reflects fair value for the case. But in response to this offer, the attorney comes down to $50,000. Or instead the attorney files a lawsuit and then serves a CCP 998 to show that he means business.

The carrier doesn’t quantify these actions in a meaningful way. If the plaintiff returns for follow up care and is recommended epidural injections or shoulder surgery or if discovery or an IME determines there there were preexisting injuries and the bulk of those injuries can be apportioned to a preexisting injury, these factors can raise or lower the value of a case. But simply threatening to file harassing discovery motions, set redundant depositions, or telling opposing counsel about the attorney’s last big jury verdict aren’t going to change the value of the case in any meaningful way.

What I’m getting at is, once the damages for a case have effectively set (there’s no change in medical condition, there’s no new loss of earnings claim, there’s no significant change of any kind), how do you plan to change the value of the case? And, what’s more important, how do you know that what you’re doing is actually raising the value of a case?

I expect that the response to these last two questions will be to list a set of tactics commonly employed by PI attorneys and then declare, “And I know they work because I got more money after I did this than I did before I filed the lawsuit.” That’s not a response supported by any kind of quantifiable metric that measures the increase in the value of the case against the time and money expended to obtain that increase. It’s just a response based on anecdotal experience.

There are certain cases where you can file a lawsuit when you’ve been offered a relatively small sum, do almost nothing for several months, and then suddenly get policy limits within about 30 days before trial. There are other cases where you can file a lawsuit after being offered a small sum, do any number of things to try and “work up” your case, and then be forced to settle for only slightly more than you were offered at the beginning or try the case and get an equally bad verdict. What I am aiming at is trying to get at the how and why of these scenarios in an objective manner that isn’t reliant on a bunch of attorneys who’ve been in these situations just talking about what they did and relying on each other’s advice, with their opinions and views colored by bias and subjective opinion.

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jeffm (Jan 28, 2019 - 10:50 pm)

tl; dr, but in your PI hypothetical, let's say it was a car wreck case that caused the injuries. What's the value if the defendant driver was distracted by a pigeon that flew into the windshield? Can your formula account for that important fact?

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trickydick (Jan 28, 2019 - 10:54 pm)

Jeff, I don’t understand why you’re being so fatuous. If you’re not interested in the point I’m making, you’re free to spend your time in other ways.

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jeffm (Jan 29, 2019 - 6:04 pm)

Why do you assume the pigeon isn't an important factor? Life is crazy like that. You can't find the formulas, and believe me, if they could, they would. This is a multi-billion dollar industry with many major players involved. It's not like you came up with a great idea. They are doing the best they can, and the state of the art is what it is.

If you believe you are on to something better, quantify it. Spec it out. Design a system and develop it. It's a massive industry.

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onehell (Jan 30, 2019 - 3:46 pm)

Jeffm isn't being fatuous. He's right. You can't algorithmically predict what a jury will do. You just can't. One of the jurors randomly just has a visceral hatred of pigeons so he thinks the driver can't possibly have any fault and he's forceful and persuasive enough to get the rest to go with him. Another jury just hates insurance companies and collateral source rule be damned they know there's one out there that they seek to punish with a big award, maybe even one that exceeds policy limits and later gives rise to one of those insurance bad faith claims where the insured sues the insurer for not making reasonable settlement offers when they had the chance. You just never know.

The insurers can, and presumably already do, have data about the kinds of offers people are likely to accept or decline and they probably do take into account factors like who the lawyer is. But if it goes to trial, everyone knows the result can't be predicted and often times can't even be ballparked. I don't think any amount of big data can fix that one unless you take the damages decision out of the jury's hands and adopt rigid guidelines for judges, kinda like how it works with sentencing decisions on the criminal side.

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jd4hire (Jan 30, 2019 - 6:19 pm)

My mom served on a jury and said she strong-armed the rest of the jurors to get to the conclusion she wanted (criminal trial about cooking the books - she wanted the dude found guilty).

Years later she served on a civil trial. She also strong-armed that one too. She told me that when they were first sent to deliberate, a guy asked which individual was the plaintiff and which individual was the defendant.

Last night I had a CLE with judges and one judge was adamant that juries do get it right. She said that she'd overseen in excess of 200 jury trials and that in all of those cases, she thought a jury got it wrong twice.

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trickydick (Jan 30, 2019 - 7:58 pm)

“You can't algorithmically predict what a jury will do. You just can't.”

I never said that was the goal. Several posts above I made it clear I don’t believe it is possible. Presumably you didn’t bother reading those posts, either.

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jeffm (Jan 31, 2019 - 9:39 am)

I doubt you were being ignored. My hunch is that all the factors which are pretty good indicators (such as amount of medical bills, clear liability, etc.) - are already all factored into whatever adjusters and attorneys currently use to value cases methodologically.

If you have come up with a genius new method, exploit it.

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trickydick (Jan 31, 2019 - 11:35 am)

I haven’t seen any indication that plaintiffs’ attorneys are relying on any systematic methodology. Their arguments for more money tend to be devoid of any reference to objective criteria and fall back on statements like:

“I can get more money at trial.”

“That’s not what other carriers pay.”

“I’ve gotten more money on cases like this before.”

There’s little or no reference to what, if any, specific factors about their cases merit the increase in value sought, just anecdotal experiences.

I’ve been on both sides of litigation and while I’ve seen carriers calibrate the value of cases based on some objective criteria, plaintiffs’ attorneys seem completely reliant on “gut feeling” to determine case value. To the extent plaintiffs’ attorneys seem reliant on any objective criteria, it is with reference to the criteria referenced and valued by carriers. It seems reasonable for plaintiffs’ attorneys to put together a separate and objective value system.

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jeffm (Jan 31, 2019 - 5:55 pm)

I understand, but that "gut feeling" you describe really comes from experience, coupled with important facts.

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trickydick (Jan 31, 2019 - 11:53 am)

I’m not talking about predicting trial results. I never argued for that anywhere in this post.

Consider that this website and the scam blog movement of which it is a part were motivated by a desire to undermine a perceived economic inefficiency. Law school students and prospective law school students were applying to law schools in record numbers on the belief that a law degree guaranteed a high income. Various people decided to find objective metrics to prove that this belief was not supported by the statistical evidence. They pushed for law schools to disclose metrics like percentage of students employed as attorneys after graduation. This effort has largely demonstrated that law degrees were grossly inflated in value by consumers.

I’m convinced there’s a similar pattern of inefficiencies plaguing the PI industry. I think the field is filled with too many ill informed and misguided attorneys who have views about how this field works that are not supported by objective data. My interest is in determining the best objective metrics that will serve to demonstrate what leads to the greatest success in the field. I think this would prove that PI attorneys are wasting an enormous amount of time and money on actions that are not value drivers.

Just taking a look at who is making the most money is not enough. The PI industry is filled with firms making millions but expending such a large chunk of gross revenues on overhead as to call into question their economic efficiency. I’m curious about a methodology to determine how PI attorneys can get the most bang for their buck. I have not developed such a system and have no plans to develop one. I’m simply presenting an idea for discussion on an open discussion forum.

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onehell (Jan 31, 2019 - 1:18 pm)

OK gotcha. But just to throw this out there, consider the fact that one advantage of settling a claim for an insurer is that the result is not public record. There may even be an NDA as part of the terms. In other words, the insurers can (and it is in their interest) to do things to actively prevent the plaintiffs bar from assembling big data about settlements that they would then use to try and extract more money from insurers.

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trickydick (Jan 31, 2019 - 7:21 pm)

That’s the critical problem I recognized when I first considered the idea. Of necessity, much of the data relating to litigation is confidential and proprietary so the difficulty obtaining it might be insurmountable. Insurance carriers gather and analyze this data and I’m sure that obtaining the information from them one way or the other is possible but the bigger issue would be gathering the information at the plaintiffs’ attorneys side of the industry. Just the nature of plaintiffs’ side firms would make gathering the information in a uniformly quantifiable manner difficult.

The other issue is that an industry wide analysis of this kind might reveal what many attorneys feel in their heart: litigation as a whole is extremely inefficient. I think a recognition of this reality on the part of non-attorneys is leading to an erosion in the field of legal practice. A study based on quantifiable data that reveals just how inefficient litigation is could very well motivate a drive to reduce the role of litigation and attorneys even further. It could very well be that the practice of law as a whole is itself an economic inefficiency.

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ambulancechaser2013 (Jan 31, 2019 - 11:59 am)

Tricky is correct in the inefficiency regard.

I am writing this post while I wait in Court for opposing counsel to show or not show on a tentative that I basically lost. Why? Because communication has collapsed with the OC. Why? Ego issues with my other partner.

So it’s the human factor (egos) that is forcing me to wake up at 5:00 am and make this meaningless appearance. And no I could not Courtcall it.

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jeffm (Jan 31, 2019 - 11:27 pm)

(medicals + disfigurement) * 1.5 + 1.25 * ego = value

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bobm (Jan 31, 2019 - 8:26 pm)

easiest way to put efficiency and objectivity in this industry would be pain and suffering guidelines. E.g. Economic damages X(guideline multiplier)=pain and suffering amount. There is no reason to think that the current system of subjective testimony and potluck juror/judge and jurisdiction selection is in any way fairer than an objective guideline multiplier, and there is 100% reason to think cases would be resolved much quicker that way.

To be sure, some cases turn on questions of liability (contributory/comparative negligence) and others can turn on things like causation (is this injury really related?).

But a huge number of simple rear ends or T-bone failure to yields are basically liability and causation conceded with an argument as to the pain and suffering amount.

Of course. if we did this, it would be hard for lawyers in those simple cases to justify their 1/3 fee. Many state legislators are also members of or have friends that are members of the MAJ. So that common sense reform would be out of the question.

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jeffm (Jan 31, 2019 - 11:29 pm)

There are some pretty serious injuries which do not require much in medicals. Quite often, they are $0.00 in death cases.

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bobm (Feb 1, 2019 - 12:20 am)

a) A quick death from an accident is unlikely to convince of a lot of pain and suffering (went quick)-also not around to testify to it. (of course in these cases even without medicals and pain and suffering there might be a lot of other damages). So a guideline based on medicals would be consistent-given that this would be a $0 medical $0 pain and suffering case-which reflects the reality of no provable pain and suffering in these cases).

b) OTOH a long tortured death-will have a LOT of medicals as the guy slowly fades away with palliative/other treatment. Thus, lots of medicals, and lots of pain and suffering (in this event you would do a deposition to preserve his testimony pre-litigation and prior to his death). So here the guidelines work with lots of medicals reflecting a reality of lots of provable pain and suffering.

So what's your case with little medicals and lots of pain and suffering?

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jeffm (Feb 1, 2019 - 5:01 am)

Amputation. Had one. Medicals only $20k. Case worth many multiples of that.

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bobm (Feb 1, 2019 - 8:59 am)

Permanency got it. Obviously that’s a good contingent for guidelines. As you know such exist in the WC field and could serve as a basis

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onehell (Feb 1, 2019 - 12:54 pm)

Wrongful death cases are brought by the family members left behind and THEIR suffering, not just the decedent's, matters. Even if the decedent had never worked or earned a dime in their life, and even if they were DOA and died instantaneously, their kids are now without a parent, the decedent's parents are now burying their kid, etc.

That's why the wrongful death of even a poor person can see seven figure judgments, so long as there's someone related to them closely enough to have standing to bring it. You can't just multiply the medicals and the economic damages in a death case, no way. A human life is priceless to the people that loved them, to say otherwise is inhumane.

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bobm (Feb 1, 2019 - 1:30 pm)

One hell the damages for lost consortium and support in a death case are not pain and suffering....different thing. As I explicitly said above there might be different damages in a case like that. By the way you should know that many states don’t allow any nonecnomic damages to a family member in a wrongful unless they were married to them (just allow loss of support but that is only if they were supported)

The suggestion has to do with pain and suffering damages. Not other damages. Not liability not causation not loss of consortium or support. Just pain and suffering.

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onehell (Feb 1, 2019 - 5:50 pm)

My state is different bout that. Back when I litigated, long ago, I took a wrongful death case all the way to the eve of trial, and then it settled at the last minute after a million depos and reams of discovery and motion practice and mediation.

We don't divide damages or limit them in that way, our statute basically just says it's whatever the jury deems just for the surviving relatives the person left behind, and allows the action to be brought by a spouse child or parent without changing the damages calc. If any one of the relatives bring the action, then it's considered brought on behalf of all them so they get notice and stuff and even if they don't participate they still get a cut of the damages if they can be found. So there's no difference in the case regardless of whether it's brought by someone's adult child or by their spouse, the damages are just whatever the jury thinks they are and neither they nor the plaintiffs are carved up into sub-categories, though the court can determine later how to split up the proceeds if the relatives can't agree.

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jeffm (Feb 1, 2019 - 6:49 pm)

Interesting. If the jury does not categorize damages, then how can an appellate court provide any meaningful review of a damages award? I'm being facetious; obviously, your state can just say, "It doesn't matter. We just look at the totality and whether, as a whole, it looks ridiculous." Still, we break down our damages awards in Texas.

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trickydick (Feb 2, 2019 - 1:26 am)

It’s instructive to examine the California workers’ compensation system in this regard. Efforts have been made to quantify the compensation a particular injury is worth through the Permanent Disability Rating System. As near as I can tell, thousands of economists and actuaries put together an incomprehensible scheme to calculate the financial costs of particular injuries and then correlate them to age and type of work performed and put a solid dollar value on them.

Not only were the tables they developed subject to problems with sample size restrictions and other data limitations but then the state legislator imposed so many restrictions and amendments compelled by political considerations that the relevance of the entire scheme is debatable. As an example, although a permanent disability is likely to reduce the lifetime income of a younger worker just starting out in the job market more than an older worker nearing retirement age, the state legislator altered the scheme to increase compensation payouts to older workers and reduce them for younger ones such that a 20 year old is effectively penalized for suffering the same injury claimed by a 60 year old and sees his potential compensation reduced by almost the same factor that the 60 year old has his increased.

It tugs at the heartstrings to see grandma suffer but no one wants to see some millennial sitting on his ass collecting checks because he sprained his wrists.

Put another way, the human element creeps in to undermine efforts to find an objective way of determining a proper value for claimed injuries.

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bobm (Feb 3, 2019 - 12:22 am)

interesting trickydick

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