Auto accidents may be the workhorse practice area for your firm, but your practice doesn’t have to focus solely on this type of personal injury case. Motor vehicle accidents account for only 52% of personal injury cases, according to the Bureau of Justice Statistics’ 2005 data*. The other 48% a mix of medical malpractice (15%), product liability (5%) and 28% “other” cases, which includes premises liability cases, slip and fall, etc.

While auto accident claims are highly profitable, other case types can generate significantly more profit when they include one key factor: punitive damages.

Punitive Damages and Higher Awards

Punitive damages are so desirable because they’re only awarded when a party was willfully or purposefully negligent, which often results in tremendous settlements. Punitive damages were only awarded in about 10% of all civil cases with a plaintiff and an individual defendant, which includes most auto accident cases, but awarded in 19% of all winning cases involving a plaintiff versus a business, according to the BJS data.

Auto accident cases settle at a median amount of $16,000; in contrast, premises liability cases had a median award of $90,000. Product liability, while it only represented a small portion of the cases covered in the BJS’s reporting, had a median award of $748,000.

While there’s no doubt that auto accident claims are profitable and desirable, other case types can yield much higher revenue due to punitive damages.

Your Time is Money, Invest It Wisely

Despite the potential for higher settlements in cases with punitive damages, even when they’re not auto accident cases, the desirability of these cases must be weighed against the additional time courts may take to resolve them. For auto accidents, the average personal injury claim took 20 months to settle, whereas the average premises liability case took around 24 months, based on the BJS data.

That’s about a 20% difference in the duration of the case; however, given that the median award for a premises liability case is more than five times that of an auto accident, additional time spent on a viable premises or product liability case that involves punitive damages is justifiable.

Punitive Damages Keep Award Amounts High

While nearly half of trials involving punitive damages also involve post-trial motions that can potentially lower a settlement, punitive damages still help to keep damages higher than they would be otherwise. The infamous 1994 Liebeck V. McDonald’s “Hot Coffee” case is a good example.

While Stella Liebeck initially sought $20,000 in compensatory damages for the third degree burns she had sustained due to the temperature of spilled McDonald’s coffee, the final amount she was awarded was up to thirty times higher than what she had asked for, in part due to punitive damages.

In the decade leading up to her settlement, there were about 700 cases of patrons scalded due to the company’s practices, leading the jury to award Liebeck 2.7 million dollars in punitive damages. While this case was ultimately settled for less than $600,000, it’s a far cry from McDonald’s original settlement offer of $800.

So, how do you capitalize on the potential for higher awards with punitive damages? As BJS data has shown, you benefit from taking personal injury claims other than just auto accident, and receiving high-quality personal injury leads is a great start. We offer a variety of personal injury lead case types, including auto accident, premises liability, and product liability cases. If you’re looking to expand your personal injury caseload, give us a call at 617.800.0089!

*Bureau of Justice 2005 Civil Case Statistics: https://www.bjs.gov/index.cfm?ty=tp&tid=45111