Should the Time Value of Money Effect My Decision to Accept a Settlement? (Part 3/3)

Going into litigation involves many risks most of which an attorney has considered and has prepared ways to overcome those risks.  This work that the attorney conducts on your behalf is part of the work he or she conducts to ensure that he or she has reached the best result for his or her client.

Some of the hurdles include, likelihood of recovery, attorney’s time (Wells Fargo doesn’t care if you’re preparing for trial—they want their money), exhibits, experts, filing fees, depositions, mediation preparation, costs of a mediator, and lastly the opportunity costs of the client’s time.  So, the attorney has most likely weighed these factors against the two values.  The hypothetical $13.31 if you win at trial of $15 and the settlement offer at present of $5.  The difference in value is $8.31.

I couldn’t even begin to determine the cost of experts on these five-buck examples, but the average cost of an expert is about a thousand bucks per hour.  That cost also includes the testing conducted and time sitting in the courtroom waiting to be called.

I know this seems convoluted, but in short remember this one thing.  As long as things get more expensive, the value of $1 today is worth more than $1 tomorrow.  I guess that would be a much easier way to say this, but I want to make sure people understand the significance.  So, I guess to answer the question I posed initially best would be to respond with another question.  How much do you trust your attorney?  It is very important to work with an attorney that practices personal injury law and has handled thousands and thousands of auto accidents.

The risk of a worse outcome by going to court rather than accepting a settlement can be hedged by making informed decisions regarding how jurors think and analyze certain facts.  Also, the different strategies employed by various insurance companies.  The legitimacy of any witnesses to be tendered as experts, and weaknesses that make them vulnerable on cross-examination.

When attorney receive payment on a contingency fee, the payment received is directly correlated to your recovery.  Wouldn’t any attorney paid this way make sure they got you the best possible recovery to guarantee they received the best possible payment?