The median cost of defending an employer through trial in an employment case is $150,000.
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Employment Litigation Update
Survey Illustrates Cost of Defense
and Liability In Employment Discrimination Claims
By Christopher W. Olmsted
A recent study released by UCLA-RAND Center for Law and Public Policy included a survey of defense costs and jury awards in California employment law discrimination cases.
The study, titled California Employment Discrimination Law and its Enforcement: The Fair Employment and Housing Act at 50,” surveyed 14 employer side attorneys regarding the cost of defense for proceedings before the Department of Fair Employment and Housing and Fair Employment and Housing Commission, as well as in civil court.
The survey shows that the median cost of defending an employer through trial is $150,000. About half of that cost, $75,000, is incurred in bringing the case through summary judgment motion.
Click Here To View Litigation Cost Chart
Notably, the survey included only 14 attorney responses, which is a very small sample. UCLA-RAND asserted that the numbers were still reliable. “While these are small samples, to the extent that they report on prices set in a market, they can still yield useful information, for the same reason that we do not need a very
large sample of gasoline or milk prices to get a reasonable sense of the range of the costs of those items.”
On the other hand, the study acknowledges that the number is only a rough generalization. “These are of course only estimates. The costs of defense of particular cases may vary widely from the ‘typical’ case and there is a significant spread in the rates charged by defense lawyers.”
The bottom line is that employment law cases can be very expensive. But employers should seek lawyers who can work efficiently and at reasonable rates. Further, it is appropriate to ask for a litigation budget before the work gets started.
Average Verdicts In Six Figures
The study also reviewed data regarding jury awards during 1998-99 and 2007-2008. The data for the two periods includes verdicts in 360 cases, brought by 417 plaintiffs.
The data showed 50/50 odds for employers to defeat a discrimination claim. “According to standard economic theory, we should expect that over large numbers of cases plaintiffs and defendants should prevail in about equal numbers, because these are the cases where each side believes they have a good chance of prevailing. We find additional support for this theory in our data. Over all the claims litigated to verdict and reported, plaintiff s prevailed in 49.8% and defendants in 50.2%.”
Of the 207 cases in the study where the plaintiff prevailed, the verdicts ranged from mid-five to low seven figures. The table below illustrates that the median verdict ranges in the low six figures.
Click Here To View Verdicts Chart
The data revealed that verdicts for race and national origin were lower than other bases of discrimination, while medical condition and sexual orientation verdicts tended to be on the higher end.
It should be remembered that these verdicts represent only half of the total lawsuits in the study. The other half resulted in defense verdicts.
Obviously the combination of defense costs and potential verdicts makes employment litigation a high stakes event.
More Legal Update articles.
Download entire March 2010 Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2010 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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