Damages & Case Value
Plaintiff's Expected Value
Calculate the expected value of a case adjusted for probability of success and time value of money, less fees and costs.
This is an estimate for settlement discussion purposes only. It is not legal advice and does not account for all possible factors.
How it works
A case worth $250,000 if you win is not worth $250,000. This tool calculates what economists call expected value: the verdict figure adjusted for the probability of winning, the time value of money, and the costs of getting there.
The math runs in three steps. First, total damages are multiplied by your estimated probability of success. Second, that probability-adjusted figure is discounted to present value based on how many years away payment is and an annual discount rate — a dollar at trial in two years is worth less than a dollar in a settlement today. Third, the costs of continuing are subtracted: attorneys' fees (leave blank for contingency arrangements, where fees scale with recovery), litigation costs, and intangible costs — the stress, lost time, and reputational exposure parties consistently underestimate.
The result is a rational benchmark to hold against the settlement number on the table.
Worked example
Damages of $250,000 with a 60% chance of success is $150,000 probability-adjusted. Payment two years out at a 4% discount rate brings it to about $138,683. Subtract $10,000 in remaining litigation costs and $5,000 of intangible costs, and the expected value of pressing on is roughly $123,683. A settlement offer near that number is not a discount — it is the math.
When to use it
Use it when a real settlement number is on the table and the client asks “should we take it?” — or before mediation, to know your own walk-away analytically rather than emotionally. Test it at several probabilities; most litigants are too optimistic about their chances, and watching the expected value move as the probability drops is often the most persuasive chart in the room.
Frequently asked questions
What is the expected value of a lawsuit?
The probability-weighted average of outcomes: roughly, what you'd expect to net per case if you could try the same case many times. It is the standard rational benchmark for evaluating a settlement offer against continued litigation.
Why discount for the time value of money?
Because a settlement pays now and a judgment pays later — often years later, after trial and appeal. Money received sooner can be invested, and money received later carries risk in the meantime. The discount rate converts a future recovery to today's dollars.
What discount rate should I use?
A common starting point is a risk-free rate (Treasury yields) or your client's actual cost of money. The default of 4% is in that neighborhood; the right number depends on the client and the era. The result usually moves less with the rate than with the probability of success — focus your honesty there.
Why include intangible costs?
Because they are real. Years of stress, depositions, document productions, and distraction from work and family have a price, and parties who ignore it systematically overvalue litigating. Put a number on it, even a rough one. And remember, most people dramatically undervalue this line item. It is hard to know the value of peace of mind, or a good night’s sleep, but it’s probably more than you think.