What is the expected value of a lawsuit?

It is the probable verdict multiplied by the probability of winning, minus the cost of getting there. A 1,000,000 verdict with a 60 percent chance of winning has a gross expected value of 600,000; subtracting 150,000 in remaining fees and costs leaves a net expected value of 450,000 for the plaintiff.

What is a BATNA and why does it matter?

BATNA is the Best Alternative To a Negotiated Agreement, the value each side gets by walking away and litigating. A plaintiff will not rationally settle below their expected value net of risk, and a defendant will not pay more than their expected exposure, so BATNAs frame the settlement zone.

What is the zone of possible agreement?

It is the overlap between the most a defendant will rationally pay and the least a plaintiff will rationally accept. When the plaintiff's floor sits below the defendant's ceiling, a deal exists in that gap; when it does not, the case may need to proceed or expectations must shift.

How should I pick the win probability?

Base it on the strength of liability and damages evidence, jurisdiction tendencies, and counsel's honest assessment, not optimism. Running the tool at a few probabilities, for example 40, 55, and 70 percent, shows how sensitive the settlement range is to that single assumption.

Does this account for the time value and stress of trial?

Not directly. The figures are pre-discount economic expectations. Rational parties usually settle for somewhat less than the raw expected value to avoid delay, risk, and the cost and stress of trial, so treat the computed range as a starting frame and discount for those factors.

Mediation Settlement Range Tool

Effective mediation starts from numbers, not positions. This tool computes the expected value of going to trial for each side and uses each party’s walk-away alternative to frame a rational settlement range, giving the mediator a defensible anchor for the conversation.

How it works

The core is a one-node decision tree. The plaintiff’s net expected value and the defendant’s expected exposure bound the negotiation:

gross EV          = verdict × win probability
plaintiff floor   = gross EV − plaintiff remaining costs
defendant ceiling = gross EV + defendant remaining costs
ZOPA exists when plaintiff floor < defendant ceiling

The plaintiff nets out their own costs, so they accept less than the gross expected value; the defendant adds the costs they avoid by settling, so they pay more. The overlap between those two is the zone of possible agreement.

Example and tips

A 1,000,000 claim with a 55 percent chance of a plaintiff verdict has a gross expected value of 550,000. If each side has 150,000 of remaining fees, the plaintiff would rationally accept as little as 400,000 and the defendant would rationally pay as much as 700,000, leaving a wide 300,000 zone to settle in. Re-run the tool across a range of win probabilities to show both parties how much the outcome turns on that single contested assumption, which itself often moves people toward the middle.