Litigation Cost Benefit Calculator

Work out litigation cost benefit instantly with clear inputs, formula shown and shareable results.

About Litigation Cost Benefit Calculator

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.

Formulas

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

Worked example

With the default values below, Litigation Cost Benefit Calculator returns Expected value of litigating of $1,956,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Value of the claim: 5,000,000
Probability of success: 60
Your legal costs to trial: 1,200,000
Costs recoverable if you win: 65

Results

Expected value of litigating: $1,956,000.00
Net outcome if you win: $4,580,000.00
Net outcome if you lose: -$1,980,000.00
Success probability needed to break even: 30.18%

Step by step

1Values used
2Value if you win
3Value if you lose
4Expected value
5Expected value of litigating= 1,956,000.00
6Net outcome if you win= 4,580,000.00
7Net outcome if you lose= -1,980,000.00
8Success probability needed to break even= 30.18

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
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.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

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.

Frequently Asked Questions

Why is the break-even probability often above 50%?

Because the downside includes two sets of costs while the upside only recovers part of one. Adverse costs regimes make marginal cases uneconomic.

Does this account for delay?

No. Discount the win value for the years to judgment and add the management time consumed, both of which worsen the case for litigating.