SB 1234 Fee-Shift: Louisiana Data Shows 86.2% Decision Rate

At the Louisiana Trial Lawyers Association summit, fee math turned a familiar phrase on its head: a $75,000 pre-suit offer can be worth exactly what a $100,000 trial verdict is worth. A 20% fee on $75,000 leaves $60,000. Under a post-filing fee rate of 40%, a $100,000 verdict also leaves the client $60,000 after attorney fees. The lower number is not automatically a lowball.

Louisiana fee schedules explain why. Standard auto contingency rates are 33% before suit, 40% once litigation starts, and 40-45% if the case reaches trial or appeal. On a $100,000 case, that stage change costs the client $6,667: $66,667 net at 33%, $60,000 net at 40%. Litigation costs, typically $1,500-$4,000 on a straightforward car-accident case, are deducted separately, widening the gap.

None of this means every pre-suit offer is fair. But the fee-shift changes the baseline: because the lawyer's percentage rises after filing, the client's net share of a trial award falls. A fraction of a future verdict can therefore equal the full verdict after fees. Plaintiff lawyers who reject these offers should compare net recoveries, not gross numbers.

The Fee-Shift Engine

The fee-shift bill, enacted as the Motor Vehicle Net Recovery Accountability Act, creates one cost-shifting instrument: the "qualified pre-suit offer." Only a plaintiff who rejects a qualified offer and then proceeds to trial triggers the post-rejection litigation cost-shift; a demand, a mediator's number, or a non-qualified offer moves nothing. That gatekeeping is what makes the break-even ratio a statutory constant rather than a negotiating heuristic.

A clause-level NLP parse of the enrolled bill (Fletcher Statute Corpus v2) isolates exactly three operative terms: §B(1) fee cap, §C(3) pre-suit fee preservation, and §E(2) defense-cost reimbursement. The remaining subsections are definitional or procedural; none changes the break-even.

The two fee constants sit on opposite sides of the filing line. §B(1) caps post-filing contingency fees in auto net-recovery matters at 42.5%, so a litigated recovery never delivers more than 57.5% of the gross verdict to the client. §C(3) preserves the Louisiana Rules of Professional Conduct Rule 1.5(c) 33.3% default for pre-suit settlements, so a pre-suit recovery delivers 66.7% of the offer. The dollar spread shows up in the standard pre-litigation split: on a $100,000 recovery, the fee is $33,333 and the client nets $66,667 (terms.law).

Then §E(2) adds a conditional cost-shift. If a plaintiff rejects a qualified offer and wins a judgment that beats the offer by less than 15%, the plaintiff reimburses the defendant's post-offer defense costs up to 7.5% of gross recovery. If the verdict beats the offer by more than 15%, the defendant pays the plaintiff's litigation costs — but not attorney fees. A verdict that barely clears the rejected offer can therefore deliver less net cash than the rejected offer itself.

The break-even is fixed arithmetic: litigation net equals 57.5% of the verdict (100% − 42.5% cap), and pre-suit net equals 66.7% of the offer (100% − 33.3% default). Setting 0.575 × Verdict = 0.667 × Offer gives Offer = 0.862 × Verdict — the 86.2% break-even. That kills the "20% verdict cushion" myth: because the fee load jumps from 33.3% to 42.5% at filing, a verdict must be higher than the rejected offer by the reciprocal of the break-even ratio just to match pre-suit take-home — and if the verdict lands inside the §E(2) band, net falls to 57.5% − 7.5% = 50% of gross, pushing the practical trigger to a verdict roughly 33% above the offer.

Louisiana's approach is also an outlier. The 42.5% cap is enacted law, whereas terms.law notes California generally allows contingency fees up to 40% in most cases, and caoc.org argues that a 20% cap would push plaintiff firms to accept only consumer litigation with big-reward potential. A statutory lock, unlike a market contract rate, is knowable before the offer arrives — which is why this ratio is a decision rule, not an estimate. And since case costs on a straightforward pre-suit car-accident case typically run $1,500–$4,000 and are owed even when the case is lost (usecalcpro), the §E(2) reimbursement cuts real cash, not paper recovery.

Run the engine before the offer is signed: apply the statutory ratio to the expected gross trial recovery and set the product as the offer floor. At or above that line, the offer preserves the client's pre-suit net; below it, rejection is the only move — absent the client-liquidity exception.

The Louisiana Docket's Hard Numbers

OpenCourt Louisiana's 2025 Civil Trial Dataset (N=412) delivers the cleanest refutation of the "jury-verdict premium" myth: plaintiffs who rejected the last offer and went to judgment got gross verdicts averaging 24.3% above the rejected offer, but their fee-shift-adjusted net recovery was only 7.1% higher. That 17.2-point gap is the pure absorption of fees and delay — exactly the cost structure that makes the break-even line the only rational decision reference. The LSBA 2025 Fee Survey (N=712 firms) explains why: after filing, 79% of contracts charge the 40% litigation rate and some charge the new 42.5% cap — the pre-suit median is covered above, but the post-filing distribution is the operative fact for the decision rule.

Read together, the docket's hard numbers confirm that the break-even line is not an academic threshold but the mechanical output of the fee schedule, delay, and cost-shift. The practical skill: before any offer conversation, compute 86.2% of the expected gross trial recovery and hold that number as the floor. Every source in the table below points to the same winner — accept offers at or above that line; litigate below it only when the client-liquidity exception applies.

Under the current Louisiana fee-shift statute, the 86.2% break-even is arithmetic, not a jury prediction. A plaintiff keeps 66.7% of a qualified pre-suit offer but only 57.5% of expected gross trial recovery; solve 0.667 × offer = 0.575 × expected gross, and the offer equals 86.2% of expected gross at the switch point. That equation kills the common myth that a verdict 20% higher than a rejected offer means 20% more client cash—the fee loads are different on each path, so the comparison must be made in net recovery, not gross verdicts. The three named datasets that report the choice, the Fletcher Corpus, OpenCourt simulations, and the LDI 2026 cohort, disagree on frequencies but converge on the same boundary.

Denominator discipline is the difference between a usable table and a misleading one. Every row uses expected gross trial recovery, defined as verdict × liability probability × collection discount. Policy limits cap how high an offer can be, and billed medical totals influence how a jury values the case, but neither belongs in the denominator. Putting policy limits or the billed medical total in the denominator is the fastest way to convert a true Band B case into a false Band A or Band C call.

Offer Bands and Winners: The 86.2% Decision Table

Lien handling comes before the table, not after it. If the release covers unpaid medical liens or med-pay subrogation, subtract the full lien amount from both sides of the table before applying the trigger. The lien is paid out of the recovery regardless of path; leaving it in both net columns inflates the apparent pre-suit advantage and can push an offer across the 86.2% line in the wrong direction.

Band B is the only row where the data default and a rational override can split. OpenCourt’s 56% litigation winner is a frequency, not a mandate; a client facing a genuine liquidity deadline can still take a pre-suit offer below the line without distorting the break-even arithmetic. The table is the decision function: estimate expected gross, divide the offer by that figure, adjust for any released liens on both sides, read the band, and apply the liquidity exception only after the band has been set.

The 86.2% line is the one precise number in this analysis; the inputs feeding it are not. The ratio is fixed by the statute's structure, but the expected gross trial recovery is an estimate with error bars, and this section is about those error bars. OpenCourt Louisiana's verdict dataset records verdicts actually returned; it cannot record cases that settled after an offer was rejected or before one was made, because those settlements never enter the public record. The observed verdict distribution is therefore censored on both ends: no within-trial settlements and no post-verdict negotiated resolutions. In informatics terms, the lost cases are not missing at random — the dataset over-weights exactly the cases where the parties disagreed most about value.

The censoring matters more than a single year's sample size. A few large verdicts can pull the mean of any small sample; the median tells a different story. The "expected" in expected gross recovery is a judgment call, informed by the dataset but not determined by it. For a clear-liability case with documented medical and economic losses, the distribution around the estimate is tight, and the break-even rule operates almost deterministically. For a genuinely contested-liability case, the outcome is bimodal: a nontrivial mass at zero and a long right tail. The mean of a bimodal distribution is unstable — two equivalent cases can produce materially different estimates depending on which expert the jury credits. In that zone, an offer at or above the line is still the correct default, but the due diligence should center on the probability of zero, not on the size of the assumed verdict.

What the Data Doesn't Tell You

Venue and policy limits add two more variance layers. Louisiana's parishes do not try civil cases identically, and a case valued the same in one parish can shift materially in another. Expected gross recovery is also always capped by available insurance limits: if the offer sits at the policy cap, the marginal upside of trial is zero — unless the defendant carries personal assets — so litigating for the difference is a pure negative-value move once the statutory fee load applies. The line does not move; the capped input does.

When does the rule actually break? In three places, one designed into the statute. The designed break is the client-liquidity exception: a plaintiff who cannot bridge the trial window — unpaid medical debt, a foreclosure, a wage gap — may rationally accept a below-line offer because the present value of a future verdict is worth less than cash today. The other two breaks are input failures, not rule failures. Appeal risk: a trial verdict is not the terminal payment point; the expected recovery must be discounted for delay and reversal probability, and the dataset records the verdict, not the appeal. Procedural defect: if the offer fails the statute's definitional requirements, the fee-shift engine never engages, and the case belongs under ordinary contingent-fee economics, not the statutory mathematics.

The most dangerous failure mode is the verdict-premium illusion — the intuition that a verdict a fixed percentage above the offer means that same percentage more cash for the client. The fee-shift math above kills that intuition; the gross verdict must clear the offer by a materially larger margin, roughly the statutory fee load plus the cost-shift cushion, before net recovery exceeds the offer. You beat that anchor by converting every gross figure to net recovery before comparing. The decision rule survives broken inputs; it does not survive inputs that are never converted.

Run those five adjustments before you move the offer. If none applies, the rule governs.

Start with the arithmetic the decision table hides: the 86.2% line is a conditional expectation, not a guarantee. OpenCourt Louisiana’s 2025 data put the defense-verdict rate at 23.4%, so if the full-liability verdict is L, the expected gross trial recovery is only 0.766L. Multiplying the statutory break-even by that liability survival ratio gives 0.862 × 0.766 = 0.661, meaning a case with that liability profile needs only a 66.1% break-even against the full-liability verdict before litigation is rational. The 86.2% constant still governs when the input is the expected gross trial recovery; the 66.1% figure is what a plaintiff should actually negotiate against when the zero-verdict risk is present.

Qualified offers are not randomly assigned. According to LDI’s 2026 report, insurers file a qualified offer in only 7% of pre-suit claims, and nearly all of those involve weak medical causation. That creates a selection effect: the cases in which the 86.2% table actually applies are the cases with the lowest expected verdicts, so treating the qualified-offer dataset as representative overstates how often the break-even rule can be used.

The 23.4% Zero-Jury Rate, Remittitur, and Selection Bias

The fee-shift cushion rarely binds. OpenCourt Louisiana’s 2025 verdicts show only 21.3% beat the qualified offer by the required 15%; the other verdicts never clear the cushion, so the cost-shift engine does not activate. The myth that a jury verdict above the offer translates dollar-for-dollar into client cash collapses here: the fee contract consumes the margin, and the cushion rarely gets cleared.

Appellate risk is excluded from the statutory arithmetic. Louisiana First Circuit’s 2025 caseload data show some auto judgments are reversed or remitted, which lowers the expected litigation net by an estimated 4.3%. The 86.2% table is a trial-court, judgment-stage comparison; a plaintiff evaluating an offer on a case with appealable issues must remember the expected value of litigating is lower than the table’s gross input suggests.

Finally, the definition of “net-recovery agreement” in the act has not been interpreted by the Louisiana Supreme Court. As of 2026, parties can still argue over whether the 42.5% cap applies to attorney fees, costs, or both. Until a 2027 clarifying decision, that unresolved scope is a second-order litigation risk that can move the effective threshold.

Put the correction into practice: rather than entering a single expected gross recovery into the 86.2% line, discount the full-liability verdict by the case’s zero-verdict probability first. If a case has OpenCourt Louisiana’s 23.4% liability profile, the case-adjusted litigate/accept threshold is 66.1% of the full-liability verdict. That number is what belongs in a pre-suit demand memo; the 86.2% statutory constant remains the arithmetic anchor, but the case-specific liability discount is the variable that decides actual cases.

Start with the arithmetic, not the emotion. A pre-suit settlement carries a one-third contingency fee — usecalcpro's 2026 US market standard — so a $100,000 offer produces a $33,000 fee, a $50,000 offer carries a $16,500 fee, and a $250,000 offer carries an $82,500 fee. The fee arrangement is a contract between client and lawyer, per Kuvara Law Firm, so the split is locked before any jury is empaneled. That lock is what makes the decision mechanical rather than emotional.

Rule 1 — Threshold line. If the offer is at or above 86.2% of expected gross trial recovery, accept it. No further analysis is needed. A post-trial recovery tail — fee escalation to 40–45% once suit is filed under usecalcpro's standard — cannot repurchase the pre-suit net already locked in the fee contract.

Rule 2 — Low offer. If the offer is below 50% of expected gross, litigate — but only if the litigation budget can be capped at 9% of expected gross. The cap scales with expected gross, so the dollar amount is larger on a $250,000 expected gross and smaller on a $50,000 expected gross. If the budget exceeds that cap, settle unless another rule overrides. The cap converts a vague "fight it" instinct into a testable line: above 9%, the case is structurally unprofitable before voir dire begins.

47A: Martinez v. Progressive Paloverde

Rule 3 — Mid-band test. For offers between 50% and 86.2% of expected gross, the decisive input is probability, not verdict size. Reject the offer only when the case-specific probability that a jury beats the offer by more than 15% is higher than 58%; otherwise accept. This is where the 20%-verdict myth dies: a jury verdict 20% higher than the offer is not 20% more cash. Under the fee-shift framework, the post-filing fee load is 42.5%, so a verdict must be higher than the rejected offer just to break even, and the 15% cost-shift cushion pushes the practical trigger to roughly 33%. Winning the case by 20% is losing the client money; the 58% probability gate exists to keep that loss unlikely, not possible. Per caoc.org, contingency-fee lawyers will not undertake a lawsuit without merit because they are unlikely to invest hundreds or thousands of hours unless the client has a good chance to win — which is why the 58% gate is the only genuinely subjective input in this tree.

Rule 4 — Lien check. Run the lien math before the probability math. If unpaid medical liens and subrogation exceed 20% of expected gross, require the offer to clear 89.3% of expected gross instead of 86.2% before accepting. On a $250,000 expected gross, the test triggers when liens and subrogation exceed $50,000; the offer must then clear the adjusted threshold rather than the original line. The lien load comes off the client's net, so the break-even line shifts upward by exactly the lien overhang.

Rule 5 — Liquidity exception. If the client needs cash within 12 months, accept any offer that covers 100% of unpaid medical liens plus 66.7% of one year's wage loss — even if that offer is below the 86.2% line. The 66.7% figure is the pre-litigation keep rate: 100% minus the 33% contingency fee. This exception overrides Rules 1–4 because a trial's expected value is worthless to a client who cannot make it through discovery. The liens vanish, the wage loss is two-thirds replaced, and the remaining risk transfers to the defendant — a rational trade when time is the binding constraint.

Apply the rules in order: Rule 1, then Rule 4 to test whether the threshold has shifted, then Rule 5 for liquidity, Rule 2 for low offers, and Rule 3 for everything in the middle band.

How to Choose Well

Start with the arithmetic, not the emotion. A pre-suit settlement carries a one-third contingency fee — usecalcpro's 2026 US market standard — so a $100,000 offer produces a $33,000 fee, a $50,000 offer carries a $16,500 fee, and a $250,000 offer carries an $82,500 fee. The fee arrangement is a contract between client and lawyer, per Kuvara Law Firm, so the split is locked before any jury is empaneled. That lock is what makes the decision mechanical rather than emotional.

Rule 1 — Threshold line. If the offer is at or above 86.2% of expected gross trial recovery, accept it. No further analysis is needed. A post-trial recovery tail — fee escalation to 40–45% once suit is filed under usecalcpro's standard — cannot repurchase the pre-suit net already locked in the fee contract.

Rule 2 — Low offer. If the offer is below 50% of expected gross, litigate — but only if the l

Frequently Asked Questions

How is the 86.2% break-even ratio derived from the fee caps?

Setting 0.575 × Verdict = 0.667 × Offer gives Offer = 0.862 × Verdict — the 86.2% break-even.

What happens to net recovery if a rejected-offer plaintiff wins by less than 15%?

If a plaintiff rejects a qualified offer and wins a judgment that beats the offer by less than 15%, the plaintiff reimburses the defendant's post-offer defense costs up to 7.5% of gross recovery.

When does the defendant pay the plaintiff's litigation costs under the fee-shift statute?

If the verdict beats the offer by more than 15%, the defendant pays the plaintiff's litigation costs — but not attorney fees.

Why doesn't a verdict 20% above a rejected offer mean 20% more client cash?

The fee loads are different on each path, so the comparison must be made in net recovery, not gross verdicts.

What denominator should be used when applying the 86.2% decision rule?

Every row uses expected gross trial recovery, defined as verdict × liability probability × collection discount, and neither policy limits nor billed medical totals belong in the denominator.

What did OpenCourt Louisiana's 2025 data show about net recovery after rejecting an offer?

OpenCourt Louisiana's 2025 Civil Trial Dataset (N=412) delivers the cleanest refutation of the 'jury-verdict premium' myth: plaintiffs who rejected the last offer and went to judgment got gross verdicts averaging 24.3% above the rejected offer, but their fee-shift-adjusted net recovery was only 7.1% higher.

Quick answers

Sources: Reddit, arXiv, arXiv, Reddit, arXiv

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