Overview
The Risk Analysis Calculator helps parties and their attorneys think realistically about the value and risk of proceeding to trial. By entering probability estimates and dollar amounts for different possible verdict outcomes, the calculator produces an expected verdict value, a present value adjusted for time, and risk-adjusted settlement benchmarks for both sides. It is a tool for informed decision-making — not a prediction.
Input Fields — Verdict Probability Inputs
Chance of $0 Verdict (%) The estimated probability that the plaintiff receives nothing at trial — either because the defendant prevails entirely or because a defense verdict is returned. Enter a whole number between 0 and 100.
Chance of Low Verdict (%) The estimated probability of a verdict in the low range you define below. This might represent a finding of liability with minimal damages, or a verdict that falls well below plaintiff’s expectations.
Chance of Medium Verdict (%) The estimated probability of a verdict in the middle range you define below. This typically represents a more moderate outcome where liability is found and damages are awarded at a reasonable level.
Chance of High Verdict (%) — Auto This field calculates automatically. It represents whatever probability remains after the $0, Low, and Medium percentages are entered. All four probabilities must add up to 100%, so this field fills in the balance for you.
Input Fields — Verdict Amount Inputs
Low Verdict Amount ($) The dollar amount that represents a low verdict outcome. This is the figure used in the expected value calculation when the Low Verdict probability applies.
Medium Verdict Amount ($) The dollar amount that represents a medium verdict outcome.
High Verdict Amount ($) The dollar amount that represents a high verdict outcome. This is typically the upper range of what plaintiff could realistically recover at trial.
Input Fields — Settlement and Cost Inputs
Current Settlement Offer ($) The settlement amount currently on the table. The calculator compares this figure against the plaintiff’s net risk-adjusted value and the gross expected verdict to help assess whether the offer is above or below those benchmarks.
Plaintiff Future Costs ($) The estimated total litigation costs the plaintiff would incur between now and the end of trial — including attorney fees, expert fees, depositions, and other expenses. These costs are subtracted from the present value of the expected verdict to arrive at the plaintiff’s true net value of going to trial.
Defense Future Costs ($) The estimated total litigation costs the defendant would incur between now and the end of trial. These costs are added to the present value of the expected verdict to reflect the defendant’s true total exposure if the case does not settle.
Years to Trial The estimated number of years before this case would actually go to trial. This is used to discount the expected verdict to its present value — because a dollar received years from now is worth less than a dollar received today.
Annual Discount Rate (%) The rate used to calculate the present value of the expected verdict. It reflects the time value of money — the idea that future dollars are worth less than current dollars. A common starting point is the current risk-free rate of return (such as a U.S. Treasury rate), though parties may use different rates depending on the circumstances. A higher discount rate reduces the present value more significantly.
Settlement Zone Buffer (%) An optional percentage that widens the suggested settlement zone on both ends for negotiation planning purposes. For example, entering 5 expands the zone by 5% above and below its calculated boundaries. This can be useful when parties want to identify a broader range of potentially acceptable outcomes rather than a precise figure.
Results Fields
Expected Verdict Amount The probability-weighted average of all possible verdict outcomes. It is calculated by multiplying each verdict amount by its probability and adding the results together. For example, if there is a 30% chance of a $500,000 verdict and a 20% chance of a $1,000,000 verdict, those outcomes contribute $150,000 and $200,000 respectively to the expected value. This figure represents the statistical average outcome at trial before adjusting for time or costs.
Present Value of Expected Verdict The expected verdict amount discounted to reflect the time value of money based on the years to trial and annual discount rate you entered. Because trial is typically years away, the present value will be lower than the expected verdict amount — reflecting the fact that money received in the future is worth less than money available today.
Plaintiff Net Risk-Adjusted Value The present value of the expected verdict minus the plaintiff’s projected future litigation costs. This is the most important number for the plaintiff — it represents the realistic net value of going to trial after accounting for both the risk of an adverse outcome and the cost of getting to a verdict. A settlement above this number is generally favorable for the plaintiff compared to the trial alternative.
Defendant Risk Value The present value of the expected verdict plus the defendant’s projected future litigation costs. This represents the defendant’s true total exposure if the case proceeds to trial — combining the expected payout with the cost of litigation. A settlement below this number is generally favorable for the defendant compared to the trial alternative.
Offer vs. Plaintiff Net Value The difference between the current settlement offer and the plaintiff’s net risk-adjusted value. A positive number shown in green means the offer exceeds what the plaintiff could realistically expect to net from trial, suggesting the offer is favorable from the plaintiff’s perspective. A negative number shown in red means the offer falls short of that benchmark.
Offer vs. Expected Verdict The difference between the current settlement offer and the gross expected verdict amount before any cost or time adjustments. This gives a broader reference point — how does the offer compare to the raw statistical average verdict? A negative number here does not necessarily mean the offer is inadequate, since the present value and cost adjustments in the other fields may still make settlement attractive.