litigation expense statistics?

wjlljr

Anyone have any recent 2002 or 2003 statistics with sources about the costs of employment litigation, i.e., defense costs and settlement costs? I am trying to persuade management that it may be better to do a pay-off to a greedy plaintiff than to pay-off the greedy *^&$*%* attorneys.

Thanks.

POPEYE

Are you in the wrong? If not, why would you even be considering it? I don't care how much it would cost, if I was sound and legal in the actions I took, I would never "payoff" someone. What will you do when the next "greedy plaintiff" (and they will) comes along?

Parabeagle

Can't help with the statistics per se, but I can give you the benefit of the experience I have had over the past few years in dealing with litigious employees. The experiences broke down thusly:

EEOC charge with mediation: mid 3-figure payout, no atty. fees, problem went away.

EEOC charge without mediation: low 4-figure payout, mid 4-figure defense atty. fees. Decision made to settle w/ claimant when cost of defense was estimated to exceed three times the value of the claim - and you can NEVER predict what a jury will do, regardless of how solid your case is.

I used to be a big believer in defending all claims based on principle. No more.

Don D

I can't help you if your goal is to convince your employer to let you handle these issues instead of utilizing a labor-law attorney. Yours is another example of people in HR getting in way over their head in areas beyond their expertise. Being confident of your defense and your position is one thing. Deciding how to proceed with the company's defense, with or without counsel is a bit beyond the expertise of a majority of HR professionals and I've been doing this for over three decades.

I can handle a multitude of things without counsel. It's the wisdom to know where the line is that impacts the company. When it comes to monetary settlements, I don't think that those decisions should ever be made without an attorney at least sitting in on that discussion or charging you a quarter-hour for his opinion.

"The greedy *^&$*%* attorneys" are the guys who keep your doors open more often than not.

Just my opinion. x:-)

Brad Forrister

I agree with Don. Each potential lawsuit is different enough that you should get advice from your employment law counsel - they know better than anyone else what the settlement value for your case is. They'll be the first ones to recommend settling if that's the best economic decision for your company. If you don't have employment law counsel that you trust to make that recommendation honestly and not greedily, you should be looking for new employment law counsel.

Brad Forrister
VP/Content
M. Lee Smith Publishers

ritaanz

It's a tough call. But you have to be realistic. Your company is in business to make money. Your job is to prevent spending it unwisely.

To me it is a question of economics not righteousness. Will I settle to pay out $20,000 to an idiot former employee or do I go court with all my documentation and statistics knowing full well that the company will win?

I pay. I just saved the company at least $50,000.
I see Beag's point, but I cannot let fear of future problems blind me in making a financial assessment.

TN HR

[font size="1" color="#FF0000"]LAST EDITED ON 12-09-04 AT 09:21AM (CST)[/font][br][br]This is always a tough issue. I'm in the thick of it right now. Do I want to win the battle or win the war? Chances are that I won't win both. More often than not, in my opinion, it makes financial sense to cut your losses as early as possible.

As of today, I am about $20K in legal expenses on a federal sexual discrimination case. We've just now only begun discovery. The legal bill will likely reach $50K by the time the whole thing is said and done.

We think the plaintiff will go away for $50K. Assuming this is the case, am I willing to gamble $20K plus the brutality of a full-blown jury trial and everything that is associated with it in order to have won the battle?

Not in a million years.

Gene

Look what I just found on SHRM's website. It's an article from yesterday's USA Today:

"Burger King franchisees settle sex harassment suit"

The owners of a Burger King franchise in suburban St. Louis will pay $400,000 to seven teenage employees and meet other conditions to settle a sexual harassment lawsuit, the U.S. Equal Employment Opportunity Commission says.

"The consent decree specifically states that Mid-America and Northwest deny all liability. The decision to settle the case was based on economics, considering the time and expense involved in a trial and the unpredictability of litigation," she said.

Full link: [url]http://www.usatoday.com/money/industries/food/2004-12-07-bk-harrassment_x.htm[/url]

Crout

This doesn't answer your question, but why shouldn't your role be to lay out ALL the options, the potential liabilities for each, and let management earn it's pay by making the decision?

marc

[font size="1" color="#FF0000"]LAST EDITED ON 12-09-04 AT 11:10AM (CST)[/font][br][br]A company I used to work for had a philosphy of fighting everything. The primary owner had a drawer full of F%%k you money that he would spend just so people knew he wasn't an easy mark. He told me he would rather spend the millions on attorneys than thousands on settlements. Not to say he did not settle, or did not lose a time or two, but when someone went after him, they knew they were in a fight and would have to spend a whole drawerfull of money to get to the end.

Shadowfax

There is a lot more to 'litigation' costs than defense and settlement costs. Consider the man hours lost searching for documents in response to a request to produce; the hours lost to making copies; to prepping people on their testimony; to time for depositions and time spent mulling over answers to interrogatories; etc. Then there are the additional costs of employees talking over what happened to whom and who will have to testify and blah blah blah. Those of you who look at it as an economic decision are exactly on track. Even if you win, you've lost untold dollars in so many ways we don't even realize. Comparatively, the legal and atty costs may be small potatoes. If it makes economic sense, settle it and get back to work. 'Principle' doesn't show up on my line items.