Work out litigation cost benefit instantly with clear inputs, formula shown and shareable results.
Litigation is an investment decision with an adverse-costs tail. Winning recovers the claim plus a proportion of costs; losing costs you your own fees and typically a share of the other side's. The break-even probability is the honest test of whether the case is worth running.
Value if you win
Win = Claim value + Recovered costs - Own costs
Value if you lose
Lose = -(Own costs + Opponent's recoverable costs)
Expected value
EV = P(win) x Win value + P(lose) x Lose value
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
Because the downside includes two sets of costs while the upside only recovers part of one. Adverse costs regimes make marginal cases uneconomic.
No. Discount the win value for the years to judgment and add the management time consumed, both of which worsen the case for litigating.