Blog Series: How Do You Determine What My Case Is Worth?
I recently published two blog entries which reviewed the various factors that go into determining the settlement value of a client’s claim. Each of those previously-discussed factors play an important part in determining what an insurance company will be willing to pay in order to settle your case. There is, however, one final consideration that we need to discuss. This factor is often overlooked by injured parties, but I assure you that it is a critical consideration for insurance carriers.
The “final factor” in determining the value of your case is the firm that is representing you. When I say this, I’m not simply talking about the firm’s reputation for competence. In order to get the maximum value for your claim, an insurance carrier has to be convinced that if they do not offer you full and fair compensation for your injuries and damages, the law firm representing you will not hesitate to take your case to trial. Believe me, if you don’t think this is an important consideration to the insurance company defending against your case, you don’t truly understand how those companies operate.
For the first ten years of my career, I worked as an insurance defense attorney. If a person caused an automobile accident and later got sued, I was the person the insurance company hired to defend the case. My firm worked for Nationwide, Allstate, Liberty Mutual, and dozens of other insurance companies too numerous to recall or list here. Each and every one of the companies we worked for was driven by one prime directive: they wanted to hang onto as much of their money as possible, and they want to hang onto it for as long as possible.
So, how does the law firm you choose factor into the settlement value equation? It’s simple, really. The insurance company needs to know for an absolute fact that if they don’t pay the amount you and your attorney are demanding in settlement negotiations, they are going to end up in trial. Insurance companies don’t like going to trial. Why? Because going to trial costs them money. Lots and lots of money. Insurance defense lawyers charge as much as $400 per hour or more to prepare and try cases. When you factor preparation time on top of actual time in the courtroom, defense trial costs can add up to a very big number. Insurance companies don’t like big numbers. They want to hang onto that money.
Back in my days as an insurance defense attorney, adjusters frequently asked me about the reputation of the lawyer representing the injured party. “Is this a guy who will take us to trial?” If my response was in the affirmative, the company was almost always willing to pay more. The carriers knew, and they still know, which lawyers will fold, and which ones will take them to trial. I can truthfully tell you that anytime I was handling a case where Jim Bordas was on the other side, the settlement value went up, simply because the carrier knew Jim was not afraid to try cases. He has instilled the importance of that reputation into every attorney here at Bordas & Bordas. Each year, the attorneys in our firm take multiple cases to trial in West Virginia, Ohio and Pennsylvania. Already this year our firm has taken several cases to trial, obtaining, for instance, a multi-million-dollar verdict in a Pennsylvania medical malpractice case. Those are the types of verdicts that cause insurance companies to sit up and take notice, and those success stories translate into higher settlement values for our cases.
There’s a story I enjoy telling about a case Jim Bordas tried thirty years ago. I was a partner at the insurance defense firm mentioned earlier, and I was sitting in court with a less-experienced attorney from our firm who was in trial for the first time. Jim had made a settlement demand prior to trial, and the insurance company had rejected it. Without going into a lot of detail, let’s just say that things didn’t go well for us at the outset of the trial. I asked the judge for a break and approached Jim about settlement again. I asked him if the demand he had made before trial was still on the table. He told me it was not, and that the plaintiffs’ demand had increased. I talked to the insurance company, and we paid the increased demand. Raising the price was Jim’s way of telling the insurance company that if you forced him to trial, you would pay a price for doing so. That is the attitude Jim demands of every attorney at Bordas & Bordas. It truly makes a difference.
Today's blog: Adding to his series, John Artimez tells us in part three about a third factor that could be the most important - the firm that is representing you.