Valuing Your Case. Practical Information.
"How much is my lawsuit worth?"
"What can you get for me?"
1. How much is my lawsuit worth?
Many people are surprised to find out that their case may not be worth as much as they think it should be worth. The fact is, despite how devastating to you losing your job might be, as you look at other sections of this website - including Employment at Will - you will find that many terminations are simply not against the law. Even where terminations or other negative job actions (such as demotion, failure to hire, failure to promote) are against the law, most cases have a modest value, at most.
2. How will my lawyer value my case?
To put a value on a case, an attorney will draw upon his or her knowledge about the type of case, the particular employer, and the jurisdiction (the state and court in which the case will be brought). The amount of recovery varies with the type of case. For instance, a disability discrimination case under the Americans with Disabilities Act may allow for punitive damages (damages to punish the employer), while an age discrimination case under the Age Discrimination in Employment Act will not allow punitive damages to be recovered. When you remove the possibility of recovering punitive damages, the value of the case is reduced. The amount of recovery varies according to the employer, as some employers refuse to settle and tend to be more litigious - willing to fight it out in court - than others. Additionally, if the employer is bankrupt or very small, their ability to pay may be very limited. The amount of recovery varies according to the jurisdiction (state and court) in which the case arises and will have to be brought. For instance, in New York, your potential legal claims are more limited than in a jurisdiction such as New Jersey. New York is very employer friendly and does not allow many "wrongful discharge" claims, while New Jersey is known to be more employee friendly.
3. What else will a lawyer look at to value my case?
Some additional criteria an employment lawyer will use to assess the value of your case are:
Your actual losses, including past and future wages. The strength of the evidence you have, the evidence that could be obtained through the pre-trial process, and the availability of credible witnesses and documents. Is it your word against theirs? Is there objective evidence of wrongdoing? As much as possible, your attorney will also look at these things from the other side’s point of view: what evidence and witnesses do they have to use against you? The estimated cost of your lawsuit, including attorney’s fees and other costs. The time it is going to take to get you a recovery. Money you get today is worth more to you than money that takes three years to recover. A lawyer will help you think about these issues, typically as part of a first consultation. Many lawyers are reluctant to put a price on a case when they first hear about it because critical information is missing: what is the other side’s story and what evidence do they have to support it?
4. I've read about verdicts that award plaintiffs millions of dollars. Will I get a similar result?
Many people who are wronged believe they now have access to a legal system that will reward them with hundreds of thousands of dollars. However, your lawyer cannot promise that your case will be worth a million dollars because, frankly, most are not worth a million dollars. The fact is, most cases settle well before trial, for much less money than would appear by reading media reports. Here are some things to consider when assessing how much your case is likely to be worth:
The overwhelming majority of cases settle without ever going to trial or even having a suit filed. Results in these cases are likely to be much lower than those cases settled after the investment of the time and money of litigation.
Even when large awards are granted by juries, many of these awards are reduced immediately by a judge or settled for a much lower amount in an effort to avoid an appeal. These award reductions often go unreported or are reported with less fanfare than the original large verdict. Many employment cases are subject to damage "caps," based upon the size of the company, which require the judge to reduce awards that exceed the cap amount.
Many employment law matters permit an employee to recover "compensatory" damages only. This means that you may be able to recover the value of your lost wages and some future salary and maybe your attorney’s fees. The huge award reported in the paper typically deal with massive punitive damages in non-employment cases. And, despite political hype to the contrary, even these huge tort awards are extremely rare occurrences!
Cases that do have a large value – the proverbial million dollar case – typically require extensive investments of time, money, resources and energy to get those recoveries. Very few cases settle for huge amounts of money without getting at least very close to trial – after many months or years of preparation have taken place.
5. How has the media distorted the reality of settling cases?
Big verdicts. Huge payoffs. The Little Guy gets ahead. These are great stories, and the media undoubtedly has an obligation to report them. However, because of this focus on huge awards, people reading the stories often are misled about the reality of the value of cases. Consider:
In 85% of stories, the media reports on cases where the employees win. In federal court, plaintiffs win only about 32% of the time.
The average reported verdict – $1,100,000 – is much higher than the true average – $150,000. For cases that settle after litigation has begun but before a verdict is reached, the media reports an average winning of approximately $3,640,000. The true average is about $125,000.
6. But my case is a slam dunk! What if my case is not like those other frivolous lawsuits?
"Slam dunk" cases very rarely exist. This point cannot be over-emphasized. You may have documents to support your position, people who promise that they’ll testify on your behalf, and what appears to be a clear case of injustice. However, the reality is, the smoking gun document is very rare, injustice is not always or even typically unlawful, and what people say they will do on your behalf often changes once they are asked to speak out in public and place their own employment at risk. Your family, friends and colleagues may have opinions about how much your case is worth, but they often do not understand the hurdles and expenses involved in getting to a high value settlement. There are no certainties in the law. Sometimes, despite good lawyering, a case will end with no money award at all. Discoveries about the facts or the law made after the case has begun can change how a case develops as can matters entirely external to the case, such as getting assigned a judge who is known to be "bad" for plaintiffs or a state agency that takes years to adjudicate a matter.
7. So, what should I hope for?
You need not be pessimistic; just be realistic. Focus on being compensated for the wrong committed against you and not on reaping a windfall. This means working with the lawyer you have selected to determine the real costs and the real benefits of pursuing a matter and doing your best to ignore the hype that you will inevitably hear at work, at home and in the news.
Many people ask these important questions when they are contemplating action against an employer. They are very reasonable questions, but they are also very difficult to answer, especially during the first stages of a lawsuit. These questions and answers are designed to help you think about this issue and help you develop some insight into how your lawyer arrives at an answer to the above questions.