The law firm of Little Mendelson developed the following hard/soft costs and average dollar and time amounts incurred by organizations to defend itself against a single claim.
- Attorney Fees if the case goes to trial: $250,000.
- Attorney Fees if the case settles prior to trial: $95,000.
- Manager time expended in the claim process: 40 hrs.
- Employee time expended in claim process: 40 hrs.
- Employee time spent investigating the claim: 60 hrs.
- Employee time spent preparing for trial: 60 hrs.
- Range of settlement costs or jury awards: $150,000 to $250,000+.
- Impact on the work group in terms of distraction and reduced morale.
- Impact on the cost of insurance if company is covered and experiences losses.
- Impact on stock price and reputation if there is publicity around the claim.
- Potential of copycat lawsuits or other claims due to internal and external publicity.
- Impact on attracting the best employees given potential negative publicity of a claim.
Source: Compliance Training Brings Superior ROI to Organizations, April 11, 2002 by Employment Law Learning Technologies and Littler Mendelson
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