When it comes to determining a settlement for a personal injury or accident claim, both sides (the plaintiff or claimant, and the defendant or liable insurance company) work to answer one core question: What would a jury do?
Settlement, by its very definition, is a compromise. It's an agreement reached by both sides based on what they think a jury might award, and the odds of winning a jury trial. So when it comes to figuring out a settlement, it's critical to understand how juries decide cases.
Understanding how juries award compensation in a personal injury lawsuit can be a difficult proposition. The calculation of a jury award can vary due to a number of factors, including apportionment of liability, jurisdictional damage caps, reduction to present value, and collateral source payments. In the sections below, we'll take a closer look at each of these factors.
Depending upon the jurisdiction in which your case was tried, a jury could be charged with apportioning liability among several parties (including you), as well as potential non-parties at fault. Any award is then reduced accordingly.
For simplicity's sake, imagine the total jury award in your personal injury case is $100,000.00. The jury finds that you are 25% at-fault for your injuries and a non-party was 25% at-fault for your injuries. The defendant was found to be 50% at-fault. Your jury award would be reduced to $50,000.00, reflecting the liability apportioned to the defendant.
The above example is a simplification of a process that occurs, in some shape or form, in nearly every jurisdiction – the laws vary, depending on your state. If there is more than one defendant, concepts of joint and several liability may come into play. And in jurisdictions operating under a pure comparative negligence system, you may not be entitled to any award if the defendant is found to be less than 51% liable for your injuries. Apportionment of liability is a major factor that must be understood when analyzing jury awards in personal injury cases.
In some jurisdictions, the amount of damages you may recover in a personal injury case has an upper limit, often called a "cap." Depending on the laws of your jurisdiction (or the local court rules), a jury could return a verdict in excess of the cap.
Most juries are not made aware of the damage caps prior to deliberating. They deliver their award, and the judge reduces it to the amount allowable under the law. Damage caps arose in part from sweeping tort reform efforts that took root across the country in the last few decades. Caps are entirely jurisdictional in nature, meaning they can vary from state to state. They also tend to vary based upon the type of case being litigated. If your personal injury case is based in medical malpractice, for example, the cap may be higher than if you were injured by "simple" negligence, such as in a slip and fall. A local personal injury attorney is your best source for information regarding any damage caps that may affect the jury award in your personal injury case.
Many plaintiffs are unaware that future economic damages (continuing loss of income, loss of future wages, etc.) are paid at the time a jury award is entered, not paid some time in the future. This is done to protect both plaintiffs and defendants from the myriad pitfalls that could arise from a long-term payment plan. As a result, a jury is normally charged with reducing awards for future economic damages to present value. Reduction to present value is the most complex process through which your jury award may be reduced, and is nearly always employed unless there are no future economic damages.
Using actuarial tables, government-published interest rates and various other financial calculators, a jury must calculate how much your future damages are worth in today's dollars. The value of money changes over time due to inflation and numerous other factors, so a dollar twenty years from now may only be worth $.50 in today's economy. Juries in personal injury cases are required take this into consideration, and reduce their awards appropriately. Your attorney should be able to explain exactly how the adjusted verdict was calculated, but the math is complex. Do not feel bad if you can't fully grasp the nuts and bolts of it -- lawyers often have special software programs to do the mathematical heavy lifting for them!
Your personal injury jury award could be reduced by the amount of any collateral source payments. Collateral source payments are payments made by entities other than the defendant that were used to compensate you for your injuries. Common examples of collateral sources in personal injury cases are medical insurance payments and workers' compensation benefits.
In nearly every instance, the jury is not made aware of the presence of collateral source payments. In fact, evidence of any collateral source payments is, by and large, inadmissible. The jury is charged with applying the law of the land to the facts of your case when reaching a verdict and offering an award. Evidence of collateral source payments could unfairly influence a jury's deliberations -- jurors could conceivably decline to offer an award if they know that you are already being compensated in some fashion. The presiding judge makes the final decision regarding any collateral source payments and reductions, relying upon local law to do so.
Understanding how a jury awards damages in a personal injury case could involve a series of calculations that would make your high school algebra teacher blush, but it's all best guess. When it comes to negotiating a settlement, an attorney with experience can offer insight based on the particulars of your case, how juries have decided in the past, and the behavior of the defense.