WHAT IS THE SETTLEMENT VALUE?
Determining the settlement value of a high-stakes lawsuit can be one of the most complicated and uncertain tasks both inside and outside attorneys must undertake. Litigators can never know everything, but part of the expertise for which clients are paying is the ability to meaningfully evaluate the risks associated with litigation. Some cases are easier than others. Many companies, like drug manufacturers that experience a large volume of similar claims, develop a sophisticated mathematical valuation matrix based on variables like claims, injuries and jurisdiction.
Many cases are not subject to such an analysis, however. For example, what does a lawyer do when a client’s major customer sues, claiming that the multimillion-dollar custom inventory management software system the company provided is a complete failure requiring rescission or a patent troll crawls out of the Piney Woods of East Texas claiming a client’s number one selling product infringes on its patent? Theories for valuing a ‘one-off’ lawsuit come in many different shapes and sizes, but ultimately both outside counsel and in-house legal departments agree with the Under Armor commercial that job one is to ‘protect this house’ – put the client in the best position to attack and reduce the settlement value of any ‘one-off’ litigation.
Evaluating a lawsuit can be likened to the early stage of a chess match. Every chess player will say that the first seven moves are critical. In the first seven moves lies the seed of one’s’ attack which, if not done properly, can doom a player to defeat. An attorney’s goal with these early moves is to mobilise his or her pieces to a proper offensive or defensive position. And the key is rapid mobilisation.
Oct-Dec 2017 issue
Lynn Pinker Cox & Hurst, LLP