Motorcycle Accident Laws in California

John D. Winer, Attorney at Law, Oakland, CA

Both drivers and passengers on motorcycles can sue another vehicle driver who has negligently caused their injuries or killed a close family member.

Conversely, although it is somewhat unusual for a vehicle driver to be injured by a motorcyclist’s negligence, if a motor vehicle driver or passenger or a pedestrian is injured by a motorcyclist, they can sue the motorcyclist if they can establish negligence.

A passenger on a motorcycle can sue the driver if the passenger can establish that the driver negligently caused their injuries.

The spouse of the injured plaintiff can also bring suit for loss of consortium damages; that is, damages for the loss of society, comfort and care of the injured plaintiff. See the section on Damages in this article.

The Importance of Establishing Liability Against Some Person or Entity in Addition to the Other Driver in a Serious Motorcycle Injury or Death Case.

i. Rarely will the other driver have sufficient assets or insurance.

Because of the degree of force involved in most collisions and because a motorcyclist is not in a protective “cage” at the time of the collision as are the drivers of other vehicles, many motorcycle accidents result in very serious injuries or death to the motorcyclist. Only in rare occasions will the vehicle driver who collided with the plaintiff have enough assets or insurance to fully compensate the motorcyclist and/or the motorcyclist’s passenger for their injuries or their survivors for their deaths.

ii. In serious injury or death cases, investigation should be conducted to establish liability of other defendants.

Thus, an attorney analyzing a motorcycle accident case on behalf of the plaintiff in which there is a very serious injury will generally look toward other potential defendants to establish responsibility and pay damages, when appropriate, to the plaintiff(s).

iii. Potential defendants in motorcycle accident cases.

Other potential defendants will include:

• the employer of the vehicle driver (whether a car, taxi, bus or truck).
• the manufacturer or seller of the motorcycle and motor vehicle involved in the accident or motorcycle helmets if there are any manufacturing or design defects.
• a shop where the motorcycle or motor vehicle involved in the accident were repaired if there is any indication that a faulty repair contributed to the accident.
• a dangerous condition of a public or private roadway that contributed to the accident such as:
• inadequate signs or signals.
• inadequate lighting.
• a design which created inadequate visibility.
• inadequate design or maintenance of the roadway.
• inadequate banking of turns.
• inadequately marked or protected construction site.
• any other dangerous condition of private or public property that contributed to the accident.
• an entity or person who negligently entrusted the motor vehicle to the defendant driver.
• a negligently or illegally parked truck, bus or other motor vehicle which contributed to the accident by cutting down or eliminating the visibility of the drivers.

Also, a driver of a motorcycle could potentially sue a passenger if the passenger, through his or her unreasonable conduct, caused the accident or was partially at fault for the accident, and as mentioned earlier, the passenger can sue the motorcycle driver if the motorcycle driver is at fault.

iv. Determination of fault amongst defendants.

If there are multiple defendants in a case, under the law, each may be responsible for the full amount of plaintiff’s economic losses such as past and future medical bills and wage loss, but will only be responsible for plaintiff’s pain, suffering and emotional distress up to the percentage of that defendant’s fault.

Definition of a Motorcycle under the California Vehicle Code

A motorcycle under the Vehicle Code is defined as any motor vehicle other than a tractor having a seat or saddle for the use of the rider and designed on not more than three wheels in contact with the ground and weighing not more than 1500 pounds, except that four wheels may be in contact with the ground when two of the wheels are a functional part of a sidecar.

Comparative Negligence

A plaintiff can recover even if he or she is also at fault. California is a comparative negligence State in which a negligent plaintiff can recover damages; however, monetary recovery is reduced by the amount of plaintiff’s fault. For instance, if a court or jury finds that a plaintiff’s damages should be valued at $1,000,000, but finds the plaintiff 25% at fault, his or her recovery would be reduced by $250,000 to $750,000.

Duty of Care of a Motorcyclist in Absence of a Particular Vehicle Code Violation.

A motorcycle by definition is a motor vehicle and a motorcyclist is subject to the same general duties as a driver of any other motor vehicles.

The general standard is that a vehicle driver must use due care for their own safety and the safety of others while driving a motor vehicle.

Special Vehicle Sections That Apply to Motorcycles

i. Freeways.

The Department of Transportation and local authorities may, by order, ordinance or resolution, with respect to freeways or designated portions of freeways under their jurisdiction, prohibit or restrict the use of a portion of a freeway to motorcyclists.

However, a restriction will not be effective until appropriate signs giving notice of the restrictions are erected upon any freeway and the freeway approaches.

ii. Headlights.

Every motorcycle during darkness shall be equipped with at least one and not more than two lighted headlamps. Further, every motorcycle manufactured after January 1, 1978 must have headlights which automatically turn on when the engine of the motorcycle is started and which remain lighted as long as the engine is running.

Whether the motorcycle is equipped with single beam or multiple beam headlights:

• the headlight must be of sufficient intensity to reveal a person or a vehicle of a distance of not less than 100 feet when the motorcycle is operated at any speed less than 25 miles an hour and at a distance of not less than 200 feet when operated at a speed of 25 to 35 miles an hour and a distance of 300 feet when operated at a speed greater than 35 miles per hour.
• if the motorcycle has a multi-beam headlamp, the upper beam must meet the minimum requirements set above.
• if there is a single beam headlight, it must be aimed so that when the vehicle is loaded, none of the high intensity portion of the light, at a distance of 25 feet ahead, will project higher than the level of the center of the lamp from which it comes.

iii. Helmets.

Every driver and passenger on a motorcycle is required to wear a helmet. In fact, it is unlawful to operate a motorcycle unless both the driver and the passenger are wearing helmets.

The helmets must meet Department of Motor Vehicle and Federal safety standards and sellers are not allowed to sell motorcycle helmets that fail to meet both State and Federal standards.

iv. Seat height requirement.

No person shall drive a motorcycle equipped with a seat in such a position that the driver’s feet cannot touch the ground.

v. Handlebars.

No person shall drive a motorcycle equipped with handlebars so positioned that the hands of the driver, when upon the grips, are at or above their shoulder height when sitting on the seat.

vi. Passenger seats.

It is unlawful for a driver of a motorcycle to carry any other person as a passenger except on a seat securely fastened to the motorcycle at the rear of the driver and provided with foot rests.

vii. Specific duty of motorcycle passengers.

Every passenger on a motorcycle not only must wear a helmet but also must keep his or her feet on the foot rests while the motorcycle is in motion.

viii. Turn signal systems.

Motorcycles manufactured before 1973 need not have a lamp-type turn signal system. All other motorcycles must be equipped with a lamp turn signal capable of clearly indicating any intention to turn either to the left or the right.

ix. Special licensing requirements.

Under the California Vehicle Code, in order to drive a motorcycle, one must hold a valid driver’s license. Plus, motorcyclists have to pass a special examination.

x. Special limitations on places on roadways where motorcycles can operate.

Motorcycles are not allowed to operate in any lane established as an exclusive or preferential use lane for high occupancy vehicles.

Further, a motorcycle cannot operate in “the area on or immediately adjacent to, the striping or other markers designating adjacent traffic lanes.”

Further, a motorcycle is also not allowed to operate in the area between two or more vehicles that are traveling in adjacent traffic lanes.

Investigation of Motorcycle Accidents

An early and thorough investigation is critical in any motorcycle injury case involving a serious injury or what may become a serious injury. A good plaintiff attorney should hire an investigator to go immediately to the scene of an accident. Even if a police report is not prepared, it is generally advisable to send a private investigator to the scene to document the state of the accident scene as close in time to possible to the date of the accident. Although this is sometimes difficult without a police report, particularly if the accident victim does not remember how or where the accident happened, but usually there is some clue. Skid marks can fade quickly; debris from the vehicles may be blown away or cleaned up and, in a case where partial fault of the accident may be due to a dangerous condition of public or private property, the condition may quickly be changed by the owner of that property.

If a police report is obtained, it is then important for the private investigator to go to the scene, sometimes with an expert witness such as an accident reconstruction expert, to check on the accuracy of the police report and fill in some of the critical areas which might not be covered by a police report.

Most police officers hate preparing thorough reports because they feel like they are only doing the bidding of insurance companies and plaintiff’s lawyers and, in their reasonable desire to clear an accident quickly so that traffic can resume, they tend to make estimates rather than take actual measurements and, due to their haste, will fail to identify and interview all of the witnesses and make mistakes on the report.

A mistaken measurement of just several inches may make the difference between a plaintiff winning or losing a case when accident reconstruction experts are later hired to help determine fault.

Obviously, a missing eyewitness may provide critical testimony which will turn a case one way or another. Thus, every effort should be made to locate all possible witnesses. In addition, one should never rely on a statement given by a witness to the police. A police officer will usually spend five minutes interviewing a witness while scratching down notes while a private investigator hired by a plaintiff’s attorney may want to spend several hours with the witness, clearly going over their testimony. Statements should be obtained from witnesses.

One thing is certain: as soon as the accident is reported by the other driver, the insurance company investigator will be at the scene within hours, if not minutes.

Expert Witnesses

i. Almost every serious injury or death case involving a motorcycle requires expert testimony to make sure plaintiff wins.

There are many different experts that can be utilized by a plaintiff in a motorcycle accident case. Generally speaking, if there is a serious injury or death involved, the plaintiff will want to retain at least an accident reconstruction expert.

Further, human factors experts that have a specialty in the relationship between people and machines can speak to the expected or reasonable behavior of drivers under a given set of circumstances and can also be particularly valuable in a motorcycle case. While most jurors are familiar with how an automobile and automobile drivers should behave under certain circumstance, they are far less familiar with the special aspects involved in motorcycles and motorcycle operation.

Thus, a human factors expert, who has expertise in motorcyclist behavior, can be an important expert witness.

ii. Motorcycle specialists.

Further, there are engineers and physicists who have special knowledge of motorcycles and motorcycle accident recreation. They should generally be retained in a motorcycle accident case unless there is clear liability.

iii. Biomedical and biomechanical engineers.

In cases involving failure of a motorcycle helmet to react properly, one should consider hiring a biomechanical or biomedical engineer who can testify about the relationship between a helmet and traumatic brain injury or death.

iv. Metallurgists and other product liability experts.

If the case involved an allegation of a defectively manufactured motorcycle or other motor vehicle, plaintiff should retain experts in the building and manufacturing of motorcycles and motorcycle tires.

What Every Expert must Know about Motorcycles and Be Able to Explain to a Jury

i. Steering.

Motorcycles do not steer anything like cars and this fact must be pointed out to a jury.

For a balanced motorcycle to travel in a curved path, it must lean. The motorcyclist has no option but to lean. Many motor vehicle drivers believe that motorcyclists are “hotrodding” when they lean around curves. This is generally very untrue.

The lean angle necessary to safely drive a motorcycle around a curve is mathematically related to the radius of the turn and the speed of the bike. The bike turns because it is leaning. The operator uses the handle bars around a curve, not directly to steer but to control the lean angle.

ii. Braking.

When a car driver slams on their brakes, it will generally skid to a stop in a straight line in a relatively short distance. However, if a motorcyclist slams on their brakes, they will skid a short distance and the motorcycle will lay down and the motorcyclist will slide to a stop directly on the pavement.

iii. Tires and wheels.

Motorcycle tires are made of the same type of materials and the same general construction as other tires, but the need to maintain traction while leaning into a turn requires certain differences. Motorcycle tires must have a round cross-section so that they can lean and maintain an efficient contact patch around curves.

Because the consequences of a tire losing its grip are so severe to motorcycle riders, motorcycle tires are optimized for traction at the expense of longevity.

Front tires transmit torque only when braking, but most wear occurs when cornering.

Rear tires transmit torque most of the time and tend to wear out straight across the tread.

iv. Blocked visibility.

In the scheme of objects in a roadway, motorcycles are very, very small and sometimes difficult to see. Even a small object such as a speed limit sign or no parking sign may block a driver’s visibility of a motorcycle for a second or more.

Motorcycles are easily hidden by utility poles, tree trunks, parked vehicles and other objects on the side of the road which might effect the ability of a motorcyclist and a car pulling out from the street, driveway or parking lot from seeing each other.

A visibility analysis must be undertaken in most motorcycle accident cases; however, before one can interpret the visibility factors accurately, one must know the relative position and speeds of the vehicle for a reasonable time period before the accident.

v. Experience of the motorcycle driver.

Beginners are involved in about 80% of all motorcycle accidents. It takes time and experience to develop the skills and reflexes needed to ride a motorcycle safely.

It is common for beginners to make mistakes such as:

• steering the wrong way.
• locking up the rear brake.
• general panic maneuvers.

vi. Lane splitting.

Although motor vehicle drivers (unless they also drive motorcycles) become universally angry at motorcyclists who “lane split” and drive by slowed or stopped vehicles in traffic jams, the fact is that this conduct is legal, because motorcycles stall in stop and go traffic which makes it more dangerous to stay in traffic than to lane split.

However, motorcyclists must be extraordinarily careful while lane splitting because of the unpredictability of motor vehicle drivers and because some motor vehicles will intentionally try to hurt them.

vii. Helmets.

The function of the helmet is to reduce the impact forces on the brain. It cannot eliminate all impact forces nor can it eliminate injuries caused by things that impact to the head. Helmets are designed to limit the acceleration experienced by the brain to about 300G in specific test protocols. Determining the protection that can be offered by helmets involve very complicated scientific computations, but the important point is that helmets are designed to protect against certain amounts and angles of force and not others.

In any motorcycle accident case involving a head injury, particularly a traumatic brain injury or death from a brain injury, the issue of whether or not a plaintiff was wearing a helmet will be critical as well as if the wearing of a helmet would have made a difference and whether the helmet was properly manufactured.

However, in a motorcycle accident case in which a motorcyclist did not suffer a head injury, there should be no relationship between the injury and the issue of whether or not a plaintiff wore a helmet; thus, if the plaintiff was not wearing a helmet, the plaintiff attorney should be able to keep the fact that the plaintiff was not wearing a helmet out of evidence in front of a jury.

Accident Reconstruction Factors in Motorcycle Accidents.

i. Point of impact.

Experts should be able to determine the point of impact and point of rest in most motorcycle accidents. Point of impact can be estimated from the damage to vehicles, the point of rest of the motorcyclist, the point of rest of clothing of the motorcyclist, paint and rubber transfers and blood and debris in the roadway.

ii. Determination of speed.

Further, speed can be estimated from:

• skidmarks, scrapes and gouges.
• momentum and speed momentum analysis.
• rotation of the car and motorcycle at impact.
• damage to the motorcycle and car.
• tire markings.

iii. Determination of visibility.

Once an accident reconstruction expert can determine the relative speed of both vehicles at significant points in time before the accident, the visibility factors can be ascertained which will help determine fault for the accident.

Photographic, Videotape, Movie and Computer Recreations

If a motorcycle accident can be accurately reconstructed, then it can sometimes be accurately recreated in a series of photographs, video, film or animated computer recreation.

Basically, all of these tools involve either, by animation or actual photography, video or film, reproducing the accident to help the jurors visualize how the accident occurred. If a movie or video recreation is made, the motorcycle and motor vehicle that were involved in the accident, or similar models are brought to the scene of the accident if possible, and the movement of the motorcycle and the vehicle toward one another in measured increments is recreated by the accident reconstruction expert and filmed and photographed by the photogrammery expert. The movement of the motorcycle and vehicle towards each other is generally done in segments, which are then edited into continuous action film or videotape which gives the allusion that the motorcycle and motor vehicle are moving towards one another at a set speed and then crashing into one another.

An increasingly more popular and less cumbersome way to visually recreate an accident is through a computer animation in which “models” of the motorcycle and motor vehicle, as well as other accident factors, are programmed into a computer. Computer animation will lack the “drama” of a movie recreation but are usually much cheaper and may be more accurate.

Any type of visual recreation can provide powerful evidence in cases in which either the motorcycle driver or driver of the other vehicle is claiming a lack of visibility and ability to see the other vehicle.

Compensatory Damages in Motorcycle Accident Cases

In a motorcycle accident case, plaintiff can recover for past medical expenses, future predicted medical expenses, past wage loss, future predicted wage loss and for past and future pain and suffering.

The medical expenses are determined by the testimony of physicians or other health care providers. Frequently, an economist or an expert in the industry determines the amount of future wage loss; however, no expert can testify to the value of pain and suffering.

Pain and suffering is typically the most significant element of a plaintiff’s damage and it includes emotional distress. Contrary to popular belief, there is no formula for pain and suffering awards and it varies greatly from case to case depending upon the location of the case, the seriousness of the injury and how well the case is presented.

Claim for Loss of Consortium.

A plaintiff’s spouse can also sue and recover damages for ‘loss of consortium.” A spouse is allowed to recover damages for the loss of society, comfort and care that result from the injured spouse’s unavailability due to their injury and having to watch the plaintiff suffer. In order to recover these damages, a spouse must be named as a party to the lawsuit and must have been married to the plaintiff at the time of the injury.

There are advantages and disadvantages to filing a loss of consortium claim that should be discussed with an attorney before filing.

Punitive Damages

Under California law, if a plaintiff can prove that the conduct of the wrongdoer was fraudulent, malicious or despicable, he or she is entitled to recover punitive damages which are intended to punish the wrongdoer and provide an example for the rest of society. The focus of this type of case is generally on the wrongdoing of the defendant as opposed to the injury to the plaintiff. The amount of punitive damage will vary depending upon the heinousness of the defendant’s misconduct and its economic status. The law recognizes that large companies have to pay more money in punitive damages to be adequately punished than small companies or individuals. In motor vehicle cases, punitive damages are most frequently awarded against drunk drivers.

O. How Soon Must a Case Be Brought After a Motorcycle Accident?

Although there are a few exceptions, generally speaking in California a case for serious personal injury must be brought within two years of the date of the accident/incident. In rare cases, that time period is extended to two years from the date of the discovery of a wrongdoing and/or an injury. However, be careful. If the case is against a public entity, the claim must be brought within six months of the date of the accident. Except in medical malpractice cases and cases against public entities, minors have until their 19th birthday to bring a case.

Considerations in Evaluating Cases for Settlement

i. Many different factors are taken into consideration when evaluating settlements.

There are many, many factors which are utilized when evaluating a case for settlement. The perception that many of the public have that a case settles for three times the medical bills and wage loss cannot be further from accurate. There are cases that settle for millions of dollars in which there are no medical bills or wage loss and there are cases that settle for a few thousand dollars in which there are hundreds of thousands of dollars of medical bills and wage loss. Following are some of the factors that are relevant to evaluating the case for settlement purposes:

ii. Liability.

The clarity of liability (i.e., fault) in the case is a critical settlement factor.

In a case in which liability is unclear or the plaintiff has a substantial chance of losing, the settlement value of the case has to be reduced significantly to factor in the plaintiff’s chances of losing.

Theoretically, if the value of an injury claim is $100,000, but plaintiff only has a 50/50 chance of winning, a $50,000 settlement may be appropriate. However, plaintiffs must always realize that cases against large defendants or in cases in which the defendant is insured, that the plaintiff has a lot more to lose than the defendant. In the example above, if the insurance company turns down a $50,000 demand and the plaintiff wins $100,000, payment of an additional $50,000 will mean very, very little to a large insurance company or corporation. On the other hand, if the plaintiff turns down the insurance company’s $50,000 offer and wins nothing at trial, it could create a devastating financial blow in which the plaintiff is unable to pay for his or her bills.

iii. Comparative fault of the plaintiff.

If a plaintiff is found to be partially at fault for causing his or her own injury, then their potential jury award is reduced on the basis of their percentage of fault. In other words, if a case were to go to trial, and plaintiff were to receive a $100,000 verdict, but was found to be 25% at fault, the plaintiff’s verdict would be reduced to $75,000. Thus, when settling a case, plaintiff should reduce his or her expectations of a settlement by the likely finding of percentage of fault that would occur if a case were to be tried.

iv. Likely jury verdict value of the case.

In cases in which insurance policy limits are not an issue, most good attorneys attempt to settle the case based upon what a jury would be likely to award if the case went to trial.

Determining what a jury will award in a given case is more of an art than science; however, reasonable estimates can be made based upon what jurors have awarded in similar cases in similar venues (i.e., locations). Most verdicts are reported in “jury sheets” that lawyers read and utilize when attempting to assess the value of any particular case.

v. Aggravated liability.

In cases in which a jury is likely to get angry at a defendant for misconduct that was something more than negligent, it is known that jurors are likely to “spike” their verdict and award more money for a plaintiff’s injury than they would if a defendant’s misconduct was merely negligent.

Aggravated liability situations, such as a drunken defendant, will increase the risk to the defendant of a large jury award and this should be taken into consideration in settlement.

vi. Punitive damage exposure.

If the defendant’s misconduct is so bad that there is a risk for punitive damages, i.e., the jury awarding damages specifically to punish the defendant, this should become a major factor in settlement negotiations. A potential award of punitive damages is complicated by the fact that under the law, the insurance company is not allowed to pay an award for punitive damages; however, normally, the defendant, through a personal attorney, attempts to apply pressure on the insurance carrier to pay more in settlement so that the defendant will not be exposed to the punitive damage risk.

vii. The character and credibility of the parties.

A plaintiff’s case is worth more if he or she is likeable and believable. It is known that jurors will award more money to people that they like and believe than people whom they dislike and don’t believe.

To a lesser extent, this is also true for defendants. A likeable or believable defendant is likely to fare better in a lawsuit than someone with the opposite traits.

viii. The extent of the injury.

Theoretically, the more serious an injury, the greater should be the value of the plaintiff’s case.

ix. Objective evidence of injury.

Injuries that can be visualized or that are able to be demonstrated by radiographic evidence such as x-rays, MRIs, CAT scans or other scientific tests, will normally result in higher settlements than injuries which depend upon the believability of the plaintiff to prove.

There are many injuries which may have severe consequences for the plaintiff which are not diagnosable by objective tests. This can include severe back problems, headaches and pain anywhere in the body. Experience has shown that jurors are hesitant to award large damages in cases in which there is no objective evidence of injury; thus, the settlement value of any case is increased by objective evidence of injury and decreased by the lack of it.

However, a credible plaintiff can sometimes overcome the lack of objective evidence of an injury and this must also be taken into consideration in the right case.

Past and future medical bills of the plaintiff.

As long as a plaintiff can establish that past medical expenses and likely future medical expenses are reasonable and related to their injuries, the bills will be an important consideration in settlement.

However, the defense will generally claim some amount of overtreatment and, thus, some portion of the medical bills should be excluded from settlement consideration. Further, the defense will argue that plaintiff will be unlikely to need or have the claimed future treatment and/or the future treatment would not be related to the subject incident.

xi. Past wage loss and future wage loss.

Wage loss is another important consideration in evaluating a claim as long as plaintiff can establish that he or she was reasonably off work or will be reasonably off work due to the subject incident. The defense will likely take the position that the amount of the wage loss should be discounted because plaintiff should have been back to work sooner and, in the case of future wage loss, the defense will claim that plaintiff could be doing some type of work which would pay them as much or almost as much as the work they were doing before the incident.

Also, for plaintiffs who are self-employed or do not have a strong consistent earning history before the accident/incident, it can become very difficult to establish a wage loss claim.

xii. Is the injury permanent.

In cases in which plaintiff has a permanent injury and some objective evidence of that injury, there will likely be a higher settlement value because the case will have more jury appeal.

xiii. Venue (where the claim will be tried).

It is beyond question that cases tried in certain locations, particularly urban locations, result in much higher verdicts than cases tried in more rural counties. This is a factor that must be taken into consideration in settlement.

xiv. Policy limits and defendant’s assets.

No matter how severe the injury, the plaintiff’s ability to recover damages against defendant will be limited by either the defendant’s policy limits or the personal assets of the defendant.

However, in cases involving motor vehicles, the plaintiff may have his or her own uninsured or underinsured motorist insurance which would provide additional coverage for the plaintiff’s injury and allow the plaintiff to receive further compensation in a settlement with their own insurance carrier.

xv. Target defendants.

Even though jurors are not supposed to consider the wealth of a defendant or whether or not the defendant is a corporation in their verdict, they are far more likely to make larger awards against large companies than they are people who they perceive to be middle class or poor. So this becomes another important settlement consideration.

Reputation and ability of attorneys.

The claims representative or defense attorney will report to the insurance carrier or defendant the ability of the plaintiff’s attorney and the likelihood that the attorney will try a case and try it well.

In situations in which the defense believes that the plaintiff’s attorney will not be willing to take the case to trial, there is little incentive to offer a significant amount of money in settlement.

On the other hand, if the defense believes that a plaintiff’s attorney will not only go to trial, but will receive an optimum verdict, the defense’s risk is increased and thus the settlement value of the case is increased.

By the same token, plaintiffs must also take into consideration the reputation and ability of the defense attorney. If the case is against a good defense attorney, plaintiff will likely receive less money from the jury; thus, the settlement value of the case, to some extent, is decreased.

Expense of litigation

The expense of litigation should also be considered in settlement. There are some cases which, if worked up properly, could result in the expenses actually being higher or almost the entire amount of an eventual settlement or verdict.

Some insurance companies and corporations are cost conscious and will take into consideration the expense of proceeding in the case versus early settlement.

However, just because a case may cost the defense $200,000 to litigate does not mean that in a case they otherwise evaluate as being worth $25,000, they are going to offer the plaintiff $200,000 in settlement.

Rather, in the above example, it may cause the corporation or insurance company to raise their offer five or ten thousand dollars or to try to settle the case early for $25,000 before expenses are actually incurred. Corporations and insurance companies are loathe to make offers of settlements based on the cost of defense because of a concern that they will be seen as an easy target for plaintiffs.