Settlement vs Trial Value Calculator

Work out settlement vs trial value instantly with clear inputs, formula shown and shareable results.

About Settlement vs Trial Value Calculator

Comparing a certain settlement with an uncertain trial means risk-adjusting the trial: the expected award times the probability of success, less trial costs and the value lost to delay. The indifference probability is the number to test with counsel, because everything else follows from it.

Formulas

Trial expected value

Trial EV = P(win) x Expected award - Trial costs and delay discount

Indifference probability

P* = (Settlement offer + Trial costs) / Expected award

Worked example

With the default values below, Settlement vs Trial Value Calculator returns Risk-adjusted value of going to trial of $1,300,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Settlement offer on the table: 2,000,000
Expected award at trial: 4,000,000
Probability of winning at trial: 55
Trial costs plus discount for delay: 900,000

Results

Risk-adjusted value of going to trial: $1,300,000.00
Settlement offer: $2,000,000.00
Advantage of trial over settling: -$700,000.00
Win probability at which you are indifferent: 72.50%

Step by step

1Values used
2Trial expected value
3Indifference probability
4Risk-adjusted value of going to trial= 1,300,000.00
5Settlement offer= 2,000,000.00
6Advantage of trial over settling= -700,000.00
7Win probability at which you are indifferent= 72.50

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

Should I always take a settlement above the trial EV?

Usually yes, and often even slightly below it, because certainty has value and litigation consumes management attention that never appears in the model.

How do I value delay?

Discount the expected award to present value over the years to judgment, using your cost of capital or the return on the settlement sum.