The following is an excerpt of Chapter 8 from McElhaney's Trial Notebook, 4th ed., modified for clarity.
Most lawyers have at one time or another dreamed of breaking the bank with a huge verdict. And because money damages are sought in the great majority of civil actions, the problems sur- rounding proving and attacking damages are important.
Establishing the basis for damages, like other areas of trial practice, is not so much a matter of arcane art or gifted oratory as it is of applying basic principles and solid preparation. And while damages are easiest to discuss with respect to personal injury cases, the underlying principles are applicable, for the most part, in all sorts of litigation. Unfortunately, the superficial reaction of some lawyers to commercial litigation is that damages are so commonly liquidated that they are not worthy of serious thought. The truth is that many commercial cases have doubtful or subjective elements of damage that may be recovered, and most commercial litigators could improve their clients’ verdicts by giving damages the sort of imaginative attention it has received from the personal injury bar.
Deciding on Damages
The first step to take in proving damages is to determine what the case is worth should it go to trial. This can only be done by researching all the permissible items of recovery—something that varies considerably from one jurisdiction to another: knowing what sorts of verdicts have been rendered in similar cases, evaluating the strengths and weaknesses of the facts and the witnesses,and, especially in the case of young lawyers, seeking the advice of more experienced litigators. Similarly, one of the benefits of local counsel consulted when trying a case in an unaccustomed forum is in evaluating what such cases are worth in the locality.
Be careful in setting a value on the case. On the one hand, making a demand that is too low is a breach of the duty you owe your client and, moreover, a sign of weakness the other side may exploit even further. On the other hand, an outrageously high demand not only bespeaks the sort of sloppy practice where the secretary drafts all the pleadings and the lawyer says, “Oh, let’s ask for $100,000,” without much thought, but also may actually hurt the case.
For despite careful disclaimers to the client, an overly high ad damnum clause may create unreasonable expectations that will hamper settlement should the client hold out for more than the case is worth. Second, an exorbitant demand in the pleadings may well convince the jury that the plaintiff is being “piggy” and it may punish him with extremely low damages or even a finding of no liability. Third, an excessive demand detracts from your credibility in settlement discussions. It is nearly always a stronger position from which to argue if the other side fears that you might actually receive a verdict for your demand. Finally, making a realistic demand is more likely to result in a settlement or verdict that will make the client happy—a corollary of the first proposition—since measured by the demand, the degree of success is likely to be higher.
Understanding that you should ask for neither too little nor too much (and there is often room for disagreement about what a case is really worth), how much should you ask for? The principles are simple to state but more difficult to apply. You should ask for no more than you can plausibly justify to the jury, and it should be about twice what you really expect to receive. Certainly the reason for the first principle is evident. But what about the second? Doubling what you actually expect to receive is important because of the natural tendency on the part of juries to compro- mise in their verdicts. The starting point in many jury discussions is what jurors see as the halfway point in the case. Asking for twice what you expect helps them start where you want. The difficulty is in harmonizing these apparently conflicting positions, which is accomplished by making the evidence and argument a believable justification for the amount you have demanded.
There is a contrary school of thought. In it, the idea is that you should ask for exactly what you want and prove every penny of it so solidly that the jury will give an award for everything you ask. There are those who have achieved real success with this method, and it appeals to one’s sense of justice and candor. However, the tendency for juries to compromise is so strong that you ought seriously to consider demanding more than what you expect to receive, but not so much that the jury is offended.
In determining the value of any case you may also pay atten- tion to what the jury will look at as a matter of common sense, irrespective of what the letter of the law may justify. For example, in representing a young, attractive, childless widow in a wrongful death case, you should not expect to receive all you might theoretically be entitled to, even if in your jurisdiction the defendant is not permitted to argue the possibility of remarriage. The jury is likely to give such a person enough to “get started again,” rather than endow her for life with a high income.