Settling Out of Court Pays Off, Study Finds

61% of plaintiffs who battle it out end up losing money
By Rob Quinn,  Newser Staff
Posted Aug 8, 2008 6:18 AM CDT
Critics of the legal profession have long charged that greedy lawyers sometimes push for a trial to maximize their fees.   ((c) umjanedoan)
camera-icon View 1 more image

(Newser) – Taking a civil lawsuit to court tends to be a costly mistake, the New York Times reports. Researchers have found that plaintiffs who reject out-of-court settlements end up with less money 61% of the time, losing an average $43,000. Defendants turned out to be right more than plainfiffs about going ahead with a trial—but the average cost of a bad call was a whopping $1.1 million.

For plaintiffs who view an offer from a defendant as "half a loaf," it's actually often "an entire loaf or more," observes the study's co-author. Behaviorists credit a wrong-headed push to the end of a court battle to human gambling impulses, while critics of the legal profession believe hefty trial fees also play a role.