Is there a rule of thumb for determining the amount one should accept for a settlement offer? The Next CEO of Stack OverflowCan one apply to be a Hooters Girl for a free settlement?Risks of requiring payment acknowledgment when requiring release without paymentCan one turn down a settlement offer if it's for more than the amount being claimed?Could I apply for a job at Hooters with the intent of suing for a settlement when they don't hire me?

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Is there a rule of thumb for determining the amount one should accept for a settlement offer?

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Is there a rule of thumb for determining the amount one should accept for a settlement offer?



The Next CEO of Stack OverflowCan one apply to be a Hooters Girl for a free settlement?Risks of requiring payment acknowledgment when requiring release without paymentCan one turn down a settlement offer if it's for more than the amount being claimed?Could I apply for a job at Hooters with the intent of suing for a settlement when they don't hire me?










6















For this question let's use the amount of $200,000 owed to the plaintiff by the defendant in a breach of contract dispute. Is there a rule of thumb for calculating how much you should accept in a settlement?



Some factors:



  • The monies owed are for specific damages based on transactions and do not include anything arbitrary such as emotional damages, etc.


  • 50% of the $200K is based on a verbal agreement and past practice


  • If I had to estimate the odds for a trial, I would put them at 70/30 for the plaintiff










share|improve this question



















  • 3





    While this question might require some opinion, it is not "primarily opinion based".

    – A. K.
    9 hours ago















6















For this question let's use the amount of $200,000 owed to the plaintiff by the defendant in a breach of contract dispute. Is there a rule of thumb for calculating how much you should accept in a settlement?



Some factors:



  • The monies owed are for specific damages based on transactions and do not include anything arbitrary such as emotional damages, etc.


  • 50% of the $200K is based on a verbal agreement and past practice


  • If I had to estimate the odds for a trial, I would put them at 70/30 for the plaintiff










share|improve this question



















  • 3





    While this question might require some opinion, it is not "primarily opinion based".

    – A. K.
    9 hours ago













6












6








6


2






For this question let's use the amount of $200,000 owed to the plaintiff by the defendant in a breach of contract dispute. Is there a rule of thumb for calculating how much you should accept in a settlement?



Some factors:



  • The monies owed are for specific damages based on transactions and do not include anything arbitrary such as emotional damages, etc.


  • 50% of the $200K is based on a verbal agreement and past practice


  • If I had to estimate the odds for a trial, I would put them at 70/30 for the plaintiff










share|improve this question
















For this question let's use the amount of $200,000 owed to the plaintiff by the defendant in a breach of contract dispute. Is there a rule of thumb for calculating how much you should accept in a settlement?



Some factors:



  • The monies owed are for specific damages based on transactions and do not include anything arbitrary such as emotional damages, etc.


  • 50% of the $200K is based on a verbal agreement and past practice


  • If I had to estimate the odds for a trial, I would put them at 70/30 for the plaintiff







breach-of-contract settlement unjust-enrichment






share|improve this question















share|improve this question













share|improve this question




share|improve this question








edited 1 hour ago







Sizzle

















asked 10 hours ago









SizzleSizzle

265111




265111







  • 3





    While this question might require some opinion, it is not "primarily opinion based".

    – A. K.
    9 hours ago












  • 3





    While this question might require some opinion, it is not "primarily opinion based".

    – A. K.
    9 hours ago







3




3





While this question might require some opinion, it is not "primarily opinion based".

– A. K.
9 hours ago





While this question might require some opinion, it is not "primarily opinion based".

– A. K.
9 hours ago










4 Answers
4






active

oldest

votes


















11














Legal question, statistical (economic) answer.



You need to evaluate the expected value of an outcome which is the sum of the product of probability of winning and the gain (or loss) from winning and the product of the probability of losing and the gain (or loss) from losing.



As a mathmatecal expression: Expected value = [P(winning) x gain] + [P(losing) x loss]



For your example, for the plantif it would be: Expected value = 70% * $200,000 + 30% * $0 = $140,000



Take the expected value and compare that to your settlement for the plaintiff anything settlement offer above $140,000 to a rational plaintiff (can't emphasize rational enough) is a good deal and they should accept. Any offer below $140,000 would be a good deal for a rational defendant. Going to trial is what happens when the parties are either irrational or estimate different and more favorable odds.



Now this doesn't account for lawyers' fees incurred which will depend on whether you are on contingency or not but this can change your outcomes. Because of these fees, many insurance companies tend to just pay out for minor claims since the cost of winning in court even if it is certain is a higher cost than the claim.



Addressing Some Good Comments: There are additional factors such as court fees, time value of money (settlement happens now, courts take years), publicity, establishing or overturning precedent, disclosure, marginal utility of money for the plaintiff, emotions from testifying, deterrence of future law suits, and infinitely more possible elements of a lawsuit that all affect the value of a given outcome win, lose or settle. All good points brought up by commenters (Thank you all). These are important considerations that vary the gain (or loss) from winning and loss from losing but are 1.) beyond the scope of this question and 2.) too broad to be addressed if it was. I think it is keep in mind that this is for the person receiving a settlement offer to estimate and decide within the limits of their assumptions and bounded rationality.






share|improve this answer




















  • 1





    Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

    – Sizzle
    7 hours ago






  • 7





    Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

    – chrylis
    7 hours ago






  • 5





    The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

    – Iñaki Viggers
    6 hours ago







  • 3





    Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

    – Nuclear Wang
    5 hours ago






  • 1





    Unless I'm mistaken, there may also be court costs, as well, to factor in.

    – jpmc26
    4 hours ago


















5















Is there a rule of thumb for determining the amount one should accept for of a settlement offer?




No. It is entirely up to the injured party to decide how much he is willing to irreversibly give away in a settlement. The party should crunch numbers to ascertain the actual amount he would receive after expenses (first and foremost, attorney fees, if he is represented by one).






share|improve this answer























  • The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

    – Sizzle
    7 hours ago


















3














A problem is that statistical "expectation" answers (percentage chance x value) are not a value one may expect to receive. They are a value which on average may be expected if there were repeated events.



For a lawyer, with many clients and cases, an accurate expectation will suggest how they can maximise their overall case wins.



But its a lot less clear how valid that is for a single client with a single case. An analogy might be - roll a die. If the number is 3 - 6 you double your money, 1 or 2 you lose it all. Now, the expectation is that for every pound/dollar you bet, you'll receive a gain of 33% (bet 6 times => lose 2 units, win back 8 units => long term expected gain is 8/6 x your bet value). Now, I as your friend suggest that as you have an expectation of profit, you should borrow heavily and bet your shirt and all you can on a single roll of the dice, and enjoy the outcome! You probably don't want to. Whereas if I suggested betting many times for £100 each, you'd probably like it, because the expectation (long term) will have a very good chance to play off.



With a single case having a 70% chance of a win and 30% chance of a lose, the risk isn't of a gradual gain/gradual loss. You get a single event only, which is that you roll the dice once, and a significant chance of both major gain and major loss. Expectations and trends and averages just aren't a good way to decide it. It can guide, but it shouldn't decide.



A better frame of mind is this. Here are 3 medical situations (not great analogies, but a high-impact single event choice we are all familiar with):



  1. Suppose you had to consider whether or not to have surgery to fix a disability (representing the damage you're currently living with in the legal situation). The surgery is guaranteed to be quick and pain-free, so the only question is the likely outcome. You have a 60% chance of complete success but 40% chance of making it worse.

  2. As above, but this time there's an 85% chance of success - but also a 15% chance of death.

  3. Finally, suppose you had usually-fatal-in-18-months cancer. Chemotherapy would be painful and cost all you have, but gives you a 20% chance of complete cure, a 20% chance of 2 more years of life, and a 60% chance of completely wasting your money and being painful as well.

Can you see from these 3 examples, how in single event cases, many people might reject an 85% success option, or accept a painful and costly 20-40% chance. Different people with different views will often differ on what they'd do. They probably would not just do a "statistical working" to decide between the options, though.



To;Dr - expected gain/loss is a helpful hint, but a bad decider.



In a single case, you need to engage your intuition about the other party, and your own needs and attitudes.



You ask for a rule of thumb, but for a single case, the best rule of thumb is to ask, "what do you think is likely to happen, what are the risks and impact if it works/fails, and what are your attitudes to those".






share|improve this answer
































    1














    Yes, you guys are correct that there isn't one standard number, but in general you should look at the amounts given in similar cases.



    I know that isn't as long and drawn out as most answers on here, but truthfully you normally look at awards in past cases.






    share|improve this answer








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      4 Answers
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      4 Answers
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      active

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      11














      Legal question, statistical (economic) answer.



      You need to evaluate the expected value of an outcome which is the sum of the product of probability of winning and the gain (or loss) from winning and the product of the probability of losing and the gain (or loss) from losing.



      As a mathmatecal expression: Expected value = [P(winning) x gain] + [P(losing) x loss]



      For your example, for the plantif it would be: Expected value = 70% * $200,000 + 30% * $0 = $140,000



      Take the expected value and compare that to your settlement for the plaintiff anything settlement offer above $140,000 to a rational plaintiff (can't emphasize rational enough) is a good deal and they should accept. Any offer below $140,000 would be a good deal for a rational defendant. Going to trial is what happens when the parties are either irrational or estimate different and more favorable odds.



      Now this doesn't account for lawyers' fees incurred which will depend on whether you are on contingency or not but this can change your outcomes. Because of these fees, many insurance companies tend to just pay out for minor claims since the cost of winning in court even if it is certain is a higher cost than the claim.



      Addressing Some Good Comments: There are additional factors such as court fees, time value of money (settlement happens now, courts take years), publicity, establishing or overturning precedent, disclosure, marginal utility of money for the plaintiff, emotions from testifying, deterrence of future law suits, and infinitely more possible elements of a lawsuit that all affect the value of a given outcome win, lose or settle. All good points brought up by commenters (Thank you all). These are important considerations that vary the gain (or loss) from winning and loss from losing but are 1.) beyond the scope of this question and 2.) too broad to be addressed if it was. I think it is keep in mind that this is for the person receiving a settlement offer to estimate and decide within the limits of their assumptions and bounded rationality.






      share|improve this answer




















      • 1





        Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

        – Sizzle
        7 hours ago






      • 7





        Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

        – chrylis
        7 hours ago






      • 5





        The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

        – Iñaki Viggers
        6 hours ago







      • 3





        Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

        – Nuclear Wang
        5 hours ago






      • 1





        Unless I'm mistaken, there may also be court costs, as well, to factor in.

        – jpmc26
        4 hours ago















      11














      Legal question, statistical (economic) answer.



      You need to evaluate the expected value of an outcome which is the sum of the product of probability of winning and the gain (or loss) from winning and the product of the probability of losing and the gain (or loss) from losing.



      As a mathmatecal expression: Expected value = [P(winning) x gain] + [P(losing) x loss]



      For your example, for the plantif it would be: Expected value = 70% * $200,000 + 30% * $0 = $140,000



      Take the expected value and compare that to your settlement for the plaintiff anything settlement offer above $140,000 to a rational plaintiff (can't emphasize rational enough) is a good deal and they should accept. Any offer below $140,000 would be a good deal for a rational defendant. Going to trial is what happens when the parties are either irrational or estimate different and more favorable odds.



      Now this doesn't account for lawyers' fees incurred which will depend on whether you are on contingency or not but this can change your outcomes. Because of these fees, many insurance companies tend to just pay out for minor claims since the cost of winning in court even if it is certain is a higher cost than the claim.



      Addressing Some Good Comments: There are additional factors such as court fees, time value of money (settlement happens now, courts take years), publicity, establishing or overturning precedent, disclosure, marginal utility of money for the plaintiff, emotions from testifying, deterrence of future law suits, and infinitely more possible elements of a lawsuit that all affect the value of a given outcome win, lose or settle. All good points brought up by commenters (Thank you all). These are important considerations that vary the gain (or loss) from winning and loss from losing but are 1.) beyond the scope of this question and 2.) too broad to be addressed if it was. I think it is keep in mind that this is for the person receiving a settlement offer to estimate and decide within the limits of their assumptions and bounded rationality.






      share|improve this answer




















      • 1





        Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

        – Sizzle
        7 hours ago






      • 7





        Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

        – chrylis
        7 hours ago






      • 5





        The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

        – Iñaki Viggers
        6 hours ago







      • 3





        Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

        – Nuclear Wang
        5 hours ago






      • 1





        Unless I'm mistaken, there may also be court costs, as well, to factor in.

        – jpmc26
        4 hours ago













      11












      11








      11







      Legal question, statistical (economic) answer.



      You need to evaluate the expected value of an outcome which is the sum of the product of probability of winning and the gain (or loss) from winning and the product of the probability of losing and the gain (or loss) from losing.



      As a mathmatecal expression: Expected value = [P(winning) x gain] + [P(losing) x loss]



      For your example, for the plantif it would be: Expected value = 70% * $200,000 + 30% * $0 = $140,000



      Take the expected value and compare that to your settlement for the plaintiff anything settlement offer above $140,000 to a rational plaintiff (can't emphasize rational enough) is a good deal and they should accept. Any offer below $140,000 would be a good deal for a rational defendant. Going to trial is what happens when the parties are either irrational or estimate different and more favorable odds.



      Now this doesn't account for lawyers' fees incurred which will depend on whether you are on contingency or not but this can change your outcomes. Because of these fees, many insurance companies tend to just pay out for minor claims since the cost of winning in court even if it is certain is a higher cost than the claim.



      Addressing Some Good Comments: There are additional factors such as court fees, time value of money (settlement happens now, courts take years), publicity, establishing or overturning precedent, disclosure, marginal utility of money for the plaintiff, emotions from testifying, deterrence of future law suits, and infinitely more possible elements of a lawsuit that all affect the value of a given outcome win, lose or settle. All good points brought up by commenters (Thank you all). These are important considerations that vary the gain (or loss) from winning and loss from losing but are 1.) beyond the scope of this question and 2.) too broad to be addressed if it was. I think it is keep in mind that this is for the person receiving a settlement offer to estimate and decide within the limits of their assumptions and bounded rationality.






      share|improve this answer















      Legal question, statistical (economic) answer.



      You need to evaluate the expected value of an outcome which is the sum of the product of probability of winning and the gain (or loss) from winning and the product of the probability of losing and the gain (or loss) from losing.



      As a mathmatecal expression: Expected value = [P(winning) x gain] + [P(losing) x loss]



      For your example, for the plantif it would be: Expected value = 70% * $200,000 + 30% * $0 = $140,000



      Take the expected value and compare that to your settlement for the plaintiff anything settlement offer above $140,000 to a rational plaintiff (can't emphasize rational enough) is a good deal and they should accept. Any offer below $140,000 would be a good deal for a rational defendant. Going to trial is what happens when the parties are either irrational or estimate different and more favorable odds.



      Now this doesn't account for lawyers' fees incurred which will depend on whether you are on contingency or not but this can change your outcomes. Because of these fees, many insurance companies tend to just pay out for minor claims since the cost of winning in court even if it is certain is a higher cost than the claim.



      Addressing Some Good Comments: There are additional factors such as court fees, time value of money (settlement happens now, courts take years), publicity, establishing or overturning precedent, disclosure, marginal utility of money for the plaintiff, emotions from testifying, deterrence of future law suits, and infinitely more possible elements of a lawsuit that all affect the value of a given outcome win, lose or settle. All good points brought up by commenters (Thank you all). These are important considerations that vary the gain (or loss) from winning and loss from losing but are 1.) beyond the scope of this question and 2.) too broad to be addressed if it was. I think it is keep in mind that this is for the person receiving a settlement offer to estimate and decide within the limits of their assumptions and bounded rationality.







      share|improve this answer














      share|improve this answer



      share|improve this answer








      edited 12 mins ago

























      answered 9 hours ago









      A. K.A. K.

      1,5411128




      1,5411128







      • 1





        Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

        – Sizzle
        7 hours ago






      • 7





        Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

        – chrylis
        7 hours ago






      • 5





        The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

        – Iñaki Viggers
        6 hours ago







      • 3





        Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

        – Nuclear Wang
        5 hours ago






      • 1





        Unless I'm mistaken, there may also be court costs, as well, to factor in.

        – jpmc26
        4 hours ago












      • 1





        Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

        – Sizzle
        7 hours ago






      • 7





        Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

        – chrylis
        7 hours ago






      • 5





        The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

        – Iñaki Viggers
        6 hours ago







      • 3





        Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

        – Nuclear Wang
        5 hours ago






      • 1





        Unless I'm mistaken, there may also be court costs, as well, to factor in.

        – jpmc26
        4 hours ago







      1




      1





      Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

      – Sizzle
      7 hours ago





      Thanks for the response. There is no insurance company I am aware of, that is involved. I will run this calculation on various winning %s. I think it may be higher than 70% but that seemed like a fair and reasonable assumption.

      – Sizzle
      7 hours ago




      7




      7





      Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

      – chrylis
      7 hours ago





      Note, of course, that the expected value of a trial may include more than just the expected awards; deterrence, NDAs, and publicity are all considerations outside the award amount that might be considered by a rational actor.

      – chrylis
      7 hours ago




      5




      5





      The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

      – Iñaki Viggers
      6 hours ago






      The reason why I would not (and, in my answer, did not) resort to the concept of expected value is that I would not want @Sizzle to be falsely confident that his probability numbers reflect his situation or the reality of litigation & settlements.Insurance companies consider the expected value (and not in isolation, but coupled with other statistics) because they have access to large data samples and actuarial expertise. I presume the OP has neither, so he is better off by focusing on other considerations to decide a one-time issue that is hardly amenable (if at all) to statistical analyses.

      – Iñaki Viggers
      6 hours ago





      3




      3





      Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

      – Nuclear Wang
      5 hours ago





      Also consider the utility of the money, which becomes particularly relevant for large sums. A rational machine won't care between a 50%-50% chance at $10M or $0, and a 100% chance of getting $5M. But $5M is already a life-changing amount, and $10M probably won't change your life twice as much, so many people would prefer the sure thing. Personal appetite for risk also plays a role here, as many people would take a sure thing of lower value than the expected value of a gamble. This isn't a casino where odds average out over the long term, so you can't count on expected value in the long run.

      – Nuclear Wang
      5 hours ago




      1




      1





      Unless I'm mistaken, there may also be court costs, as well, to factor in.

      – jpmc26
      4 hours ago





      Unless I'm mistaken, there may also be court costs, as well, to factor in.

      – jpmc26
      4 hours ago











      5















      Is there a rule of thumb for determining the amount one should accept for of a settlement offer?




      No. It is entirely up to the injured party to decide how much he is willing to irreversibly give away in a settlement. The party should crunch numbers to ascertain the actual amount he would receive after expenses (first and foremost, attorney fees, if he is represented by one).






      share|improve this answer























      • The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

        – Sizzle
        7 hours ago















      5















      Is there a rule of thumb for determining the amount one should accept for of a settlement offer?




      No. It is entirely up to the injured party to decide how much he is willing to irreversibly give away in a settlement. The party should crunch numbers to ascertain the actual amount he would receive after expenses (first and foremost, attorney fees, if he is represented by one).






      share|improve this answer























      • The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

        – Sizzle
        7 hours ago













      5












      5








      5








      Is there a rule of thumb for determining the amount one should accept for of a settlement offer?




      No. It is entirely up to the injured party to decide how much he is willing to irreversibly give away in a settlement. The party should crunch numbers to ascertain the actual amount he would receive after expenses (first and foremost, attorney fees, if he is represented by one).






      share|improve this answer














      Is there a rule of thumb for determining the amount one should accept for of a settlement offer?




      No. It is entirely up to the injured party to decide how much he is willing to irreversibly give away in a settlement. The party should crunch numbers to ascertain the actual amount he would receive after expenses (first and foremost, attorney fees, if he is represented by one).







      share|improve this answer












      share|improve this answer



      share|improve this answer










      answered 9 hours ago









      Iñaki ViggersIñaki Viggers

      10.4k21530




      10.4k21530












      • The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

        – Sizzle
        7 hours ago

















      • The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

        – Sizzle
        7 hours ago
















      The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

      – Sizzle
      7 hours ago





      The legal fees are such that a lump sum has been paid and the lawyer gets 30% of money recovered over a certain amount. Thanks for the input.

      – Sizzle
      7 hours ago











      3














      A problem is that statistical "expectation" answers (percentage chance x value) are not a value one may expect to receive. They are a value which on average may be expected if there were repeated events.



      For a lawyer, with many clients and cases, an accurate expectation will suggest how they can maximise their overall case wins.



      But its a lot less clear how valid that is for a single client with a single case. An analogy might be - roll a die. If the number is 3 - 6 you double your money, 1 or 2 you lose it all. Now, the expectation is that for every pound/dollar you bet, you'll receive a gain of 33% (bet 6 times => lose 2 units, win back 8 units => long term expected gain is 8/6 x your bet value). Now, I as your friend suggest that as you have an expectation of profit, you should borrow heavily and bet your shirt and all you can on a single roll of the dice, and enjoy the outcome! You probably don't want to. Whereas if I suggested betting many times for £100 each, you'd probably like it, because the expectation (long term) will have a very good chance to play off.



      With a single case having a 70% chance of a win and 30% chance of a lose, the risk isn't of a gradual gain/gradual loss. You get a single event only, which is that you roll the dice once, and a significant chance of both major gain and major loss. Expectations and trends and averages just aren't a good way to decide it. It can guide, but it shouldn't decide.



      A better frame of mind is this. Here are 3 medical situations (not great analogies, but a high-impact single event choice we are all familiar with):



      1. Suppose you had to consider whether or not to have surgery to fix a disability (representing the damage you're currently living with in the legal situation). The surgery is guaranteed to be quick and pain-free, so the only question is the likely outcome. You have a 60% chance of complete success but 40% chance of making it worse.

      2. As above, but this time there's an 85% chance of success - but also a 15% chance of death.

      3. Finally, suppose you had usually-fatal-in-18-months cancer. Chemotherapy would be painful and cost all you have, but gives you a 20% chance of complete cure, a 20% chance of 2 more years of life, and a 60% chance of completely wasting your money and being painful as well.

      Can you see from these 3 examples, how in single event cases, many people might reject an 85% success option, or accept a painful and costly 20-40% chance. Different people with different views will often differ on what they'd do. They probably would not just do a "statistical working" to decide between the options, though.



      To;Dr - expected gain/loss is a helpful hint, but a bad decider.



      In a single case, you need to engage your intuition about the other party, and your own needs and attitudes.



      You ask for a rule of thumb, but for a single case, the best rule of thumb is to ask, "what do you think is likely to happen, what are the risks and impact if it works/fails, and what are your attitudes to those".






      share|improve this answer





























        3














        A problem is that statistical "expectation" answers (percentage chance x value) are not a value one may expect to receive. They are a value which on average may be expected if there were repeated events.



        For a lawyer, with many clients and cases, an accurate expectation will suggest how they can maximise their overall case wins.



        But its a lot less clear how valid that is for a single client with a single case. An analogy might be - roll a die. If the number is 3 - 6 you double your money, 1 or 2 you lose it all. Now, the expectation is that for every pound/dollar you bet, you'll receive a gain of 33% (bet 6 times => lose 2 units, win back 8 units => long term expected gain is 8/6 x your bet value). Now, I as your friend suggest that as you have an expectation of profit, you should borrow heavily and bet your shirt and all you can on a single roll of the dice, and enjoy the outcome! You probably don't want to. Whereas if I suggested betting many times for £100 each, you'd probably like it, because the expectation (long term) will have a very good chance to play off.



        With a single case having a 70% chance of a win and 30% chance of a lose, the risk isn't of a gradual gain/gradual loss. You get a single event only, which is that you roll the dice once, and a significant chance of both major gain and major loss. Expectations and trends and averages just aren't a good way to decide it. It can guide, but it shouldn't decide.



        A better frame of mind is this. Here are 3 medical situations (not great analogies, but a high-impact single event choice we are all familiar with):



        1. Suppose you had to consider whether or not to have surgery to fix a disability (representing the damage you're currently living with in the legal situation). The surgery is guaranteed to be quick and pain-free, so the only question is the likely outcome. You have a 60% chance of complete success but 40% chance of making it worse.

        2. As above, but this time there's an 85% chance of success - but also a 15% chance of death.

        3. Finally, suppose you had usually-fatal-in-18-months cancer. Chemotherapy would be painful and cost all you have, but gives you a 20% chance of complete cure, a 20% chance of 2 more years of life, and a 60% chance of completely wasting your money and being painful as well.

        Can you see from these 3 examples, how in single event cases, many people might reject an 85% success option, or accept a painful and costly 20-40% chance. Different people with different views will often differ on what they'd do. They probably would not just do a "statistical working" to decide between the options, though.



        To;Dr - expected gain/loss is a helpful hint, but a bad decider.



        In a single case, you need to engage your intuition about the other party, and your own needs and attitudes.



        You ask for a rule of thumb, but for a single case, the best rule of thumb is to ask, "what do you think is likely to happen, what are the risks and impact if it works/fails, and what are your attitudes to those".






        share|improve this answer



























          3












          3








          3







          A problem is that statistical "expectation" answers (percentage chance x value) are not a value one may expect to receive. They are a value which on average may be expected if there were repeated events.



          For a lawyer, with many clients and cases, an accurate expectation will suggest how they can maximise their overall case wins.



          But its a lot less clear how valid that is for a single client with a single case. An analogy might be - roll a die. If the number is 3 - 6 you double your money, 1 or 2 you lose it all. Now, the expectation is that for every pound/dollar you bet, you'll receive a gain of 33% (bet 6 times => lose 2 units, win back 8 units => long term expected gain is 8/6 x your bet value). Now, I as your friend suggest that as you have an expectation of profit, you should borrow heavily and bet your shirt and all you can on a single roll of the dice, and enjoy the outcome! You probably don't want to. Whereas if I suggested betting many times for £100 each, you'd probably like it, because the expectation (long term) will have a very good chance to play off.



          With a single case having a 70% chance of a win and 30% chance of a lose, the risk isn't of a gradual gain/gradual loss. You get a single event only, which is that you roll the dice once, and a significant chance of both major gain and major loss. Expectations and trends and averages just aren't a good way to decide it. It can guide, but it shouldn't decide.



          A better frame of mind is this. Here are 3 medical situations (not great analogies, but a high-impact single event choice we are all familiar with):



          1. Suppose you had to consider whether or not to have surgery to fix a disability (representing the damage you're currently living with in the legal situation). The surgery is guaranteed to be quick and pain-free, so the only question is the likely outcome. You have a 60% chance of complete success but 40% chance of making it worse.

          2. As above, but this time there's an 85% chance of success - but also a 15% chance of death.

          3. Finally, suppose you had usually-fatal-in-18-months cancer. Chemotherapy would be painful and cost all you have, but gives you a 20% chance of complete cure, a 20% chance of 2 more years of life, and a 60% chance of completely wasting your money and being painful as well.

          Can you see from these 3 examples, how in single event cases, many people might reject an 85% success option, or accept a painful and costly 20-40% chance. Different people with different views will often differ on what they'd do. They probably would not just do a "statistical working" to decide between the options, though.



          To;Dr - expected gain/loss is a helpful hint, but a bad decider.



          In a single case, you need to engage your intuition about the other party, and your own needs and attitudes.



          You ask for a rule of thumb, but for a single case, the best rule of thumb is to ask, "what do you think is likely to happen, what are the risks and impact if it works/fails, and what are your attitudes to those".






          share|improve this answer















          A problem is that statistical "expectation" answers (percentage chance x value) are not a value one may expect to receive. They are a value which on average may be expected if there were repeated events.



          For a lawyer, with many clients and cases, an accurate expectation will suggest how they can maximise their overall case wins.



          But its a lot less clear how valid that is for a single client with a single case. An analogy might be - roll a die. If the number is 3 - 6 you double your money, 1 or 2 you lose it all. Now, the expectation is that for every pound/dollar you bet, you'll receive a gain of 33% (bet 6 times => lose 2 units, win back 8 units => long term expected gain is 8/6 x your bet value). Now, I as your friend suggest that as you have an expectation of profit, you should borrow heavily and bet your shirt and all you can on a single roll of the dice, and enjoy the outcome! You probably don't want to. Whereas if I suggested betting many times for £100 each, you'd probably like it, because the expectation (long term) will have a very good chance to play off.



          With a single case having a 70% chance of a win and 30% chance of a lose, the risk isn't of a gradual gain/gradual loss. You get a single event only, which is that you roll the dice once, and a significant chance of both major gain and major loss. Expectations and trends and averages just aren't a good way to decide it. It can guide, but it shouldn't decide.



          A better frame of mind is this. Here are 3 medical situations (not great analogies, but a high-impact single event choice we are all familiar with):



          1. Suppose you had to consider whether or not to have surgery to fix a disability (representing the damage you're currently living with in the legal situation). The surgery is guaranteed to be quick and pain-free, so the only question is the likely outcome. You have a 60% chance of complete success but 40% chance of making it worse.

          2. As above, but this time there's an 85% chance of success - but also a 15% chance of death.

          3. Finally, suppose you had usually-fatal-in-18-months cancer. Chemotherapy would be painful and cost all you have, but gives you a 20% chance of complete cure, a 20% chance of 2 more years of life, and a 60% chance of completely wasting your money and being painful as well.

          Can you see from these 3 examples, how in single event cases, many people might reject an 85% success option, or accept a painful and costly 20-40% chance. Different people with different views will often differ on what they'd do. They probably would not just do a "statistical working" to decide between the options, though.



          To;Dr - expected gain/loss is a helpful hint, but a bad decider.



          In a single case, you need to engage your intuition about the other party, and your own needs and attitudes.



          You ask for a rule of thumb, but for a single case, the best rule of thumb is to ask, "what do you think is likely to happen, what are the risks and impact if it works/fails, and what are your attitudes to those".







          share|improve this answer














          share|improve this answer



          share|improve this answer








          edited 5 hours ago

























          answered 5 hours ago









          StilezStilez

          943211




          943211





















              1














              Yes, you guys are correct that there isn't one standard number, but in general you should look at the amounts given in similar cases.



              I know that isn't as long and drawn out as most answers on here, but truthfully you normally look at awards in past cases.






              share|improve this answer








              New contributor




              Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
              Check out our Code of Conduct.
























                1














                Yes, you guys are correct that there isn't one standard number, but in general you should look at the amounts given in similar cases.



                I know that isn't as long and drawn out as most answers on here, but truthfully you normally look at awards in past cases.






                share|improve this answer








                New contributor




                Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
                Check out our Code of Conduct.






















                  1












                  1








                  1







                  Yes, you guys are correct that there isn't one standard number, but in general you should look at the amounts given in similar cases.



                  I know that isn't as long and drawn out as most answers on here, but truthfully you normally look at awards in past cases.






                  share|improve this answer








                  New contributor




                  Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
                  Check out our Code of Conduct.










                  Yes, you guys are correct that there isn't one standard number, but in general you should look at the amounts given in similar cases.



                  I know that isn't as long and drawn out as most answers on here, but truthfully you normally look at awards in past cases.







                  share|improve this answer








                  New contributor




                  Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
                  Check out our Code of Conduct.









                  share|improve this answer



                  share|improve this answer






                  New contributor




                  Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
                  Check out our Code of Conduct.









                  answered 9 hours ago









                  PutviPutvi

                  1303




                  1303




                  New contributor




                  Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
                  Check out our Code of Conduct.





                  New contributor





                  Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
                  Check out our Code of Conduct.






                  Putvi is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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                      ValueError: Expected n_neighbors <= n_samples, but n_samples = 1, n_neighbors = 6 (SMOTE) The 2019 Stack Overflow Developer Survey Results Are InCan SMOTE be applied over sequence of words (sentences)?ValueError when doing validation with random forestsSMOTE and multi class oversamplingLogic behind SMOTE-NC?ValueError: Error when checking target: expected dense_1 to have shape (7,) but got array with shape (1,)SmoteBoost: Should SMOTE be ran individually for each iteration/tree in the boosting?solving multi-class imbalance classification using smote and OSSUsing SMOTE for Synthetic Data generation to improve performance on unbalanced dataproblem of entry format for a simple model in KerasSVM SMOTE fit_resample() function runs forever with no result