10-Step Valuation Pipeline

How Mediatio Values Cases

100+ variables. 10,000 Monte Carlo simulations. Bayesian updating. Jurisdiction-calibrated benchmarks. Every valuation runs through a rigorous 10-step pipeline grounded in statistical methodology.

Below is the complete mathematical framework. No black boxes.

Step 1

Base Damages

Economic damages (medical bills, lost wages, future costs) are summed, then non-economic damages are calculated using severity multipliers applied to the economic total.

Formula
BaseDmg = EconDmg + (EconDmg x SeverityMult x PrognosisAdj)
Severity multipliers: Minor 1.0x, Moderate 2.5x, Severe 5.0x, Catastrophic 10.0x
Prognosis adjustments: Full Recovery 0.8, Partial 1.0, Permanent 1.3, Degenerative 1.5
Future costs discounted to present value at 4% rate
Step 2

Liability Discount

Base damages are reduced by how strong the plaintiff's case is on both fault and causation. Comparative negligence directly reduces the recoverable amount.

Formula
LiabDisc = LiabilityStrength x (1 - ComparativeNegligence)
Pure comparative states allow recovery even at 99% fault
Modified states (51% bar) mean zero recovery above the threshold
Causation strength is factored in as an additional multiplier when relevant
Step 3

Jurisdiction & Trial Risk

Jurisdiction multipliers capture state-level plaintiff friendliness. A 7-factor trial risk score weights venue, judge, jury, witnesses, documents, expert quality, and adverse events.

Formula
TrialRisk = (Venue x 0.20) + (Judge x 0.15) + (Jury x 0.15) + (Witnesses x 0.15) + (Docs x 0.15) + (Expert x 0.10) - (Adverse x 0.10)
State multipliers: FL 1.50x, CA 1.30x, NY 1.30x, IL 1.20x, TX 1.20x, and more
Each trial risk factor rated 1-10, composite normalized to 0-1
County-level venue data captures local variation within states
Step 4

Black Swan Events

Low-probability, high-impact factors that can dramatically inflate case value. Multiple black swan factors compound multiplicatively.

Formula
BlackSwanMult = LitFunding x Reptile x NuclearRisk x SocialInflation
Litigation Funding (1.15x) increases plaintiff holding power
Reptile Theory (1.20x) when community danger framing is used
Nuclear Verdict Risk (1.0-1.25x) for strong emotional facts or corporate defendants
Social Inflation (1.05-1.15x) for upward trend in jury awards
Step 5

Verdict Scenarios

Five discrete scenarios — Defense ($0), Low (40%), Mid (70%), High (100%), and Nuclear (250%) — each assigned a probability. The Expected Value is the probability-weighted sum.

Formula
EV = Sum( Scenario_Value x Scenario_Probability )
Probabilities calibrated from historical verdict data by case type
Defense verdict probability rises with weaker liability
Nuclear scenario elevated when black swan factors are present
Step 6

Monte Carlo Simulation

10,000 simulated trials randomly sample from probability distributions for every key variable, producing a full distribution of outcomes rather than a single estimate.

Formula
For i = 1..10,000: Sample(BaseDmg, Liability, TrialRisk, ...) -> Outcome_i
Damages modeled as log-normal (right-skewed, non-negative)
Extreme verdicts modeled as Pareto (fat-tailed)
Correlated variables prevent unrealistic combinations
Output: P10 (floor), P25, P50 (median), P75, P90 (ceiling)
Step 7

Bayesian Adjustments

Starting with case-type priors (historical base rates), the estimate shifts based on case-specific evidence. More data means the evidence weight increases and the prior matters less.

Formula
Posterior = Prior x Likelihood(Evidence) / Normalization
Case-type priors: class actions start with certification probability factored in
Strong documentary evidence weighted higher than circumstantial
Prevents extreme estimates when evidence is thin
Step 8

Risk Discounts

Procedural risks — summary judgment, appeal, and collection — each reduce the expected recovery. Settlement discounts reflect that ~95% of cases settle below full trial value.

Formula
RiskAdj = (1 - MSJ_Risk) x (1 - Appeal_Risk) x (1 - Collection_Risk)
MSJ risk varies by case complexity and evidentiary burden
Appeal risk higher for very large verdicts or novel legal theories
Settlement discount varies by case type: Auto 0.85, Truck 0.80, Class Action 0.65
Step 9

Case Type Benchmarks

Every valuation is calibrated against historical benchmarks — median verdicts, plaintiff win rates, and settlement rates from national verdict databases.

Formula
If CaseEV > 3 x MedianVerdict -> flag and apply dampening
Auto: median $31K, win 61% | Truck: median $73K, win 57%
Motorcycle: median $45K, win 58% | Pedestrian: median $52K, win 60%
Benchmarks are guardrails — your case can deviate if facts justify it
Step 10

Final Output

The pipeline produces a probability distribution — not just one number. You get a floor (P10), median (P50), ceiling (P90), Expected Value, and a settlement recommendation.

Formula
Final = { EV, P10 Floor, P50 Median, P90 Ceiling, Settlement Range }
P10 = 90% chance of exceeding this amount
P90 = only 10% chance of exceeding this amount
Settlement recommendation applies case-type discount to EV
Wider P10-P90 spread = more case uncertainty
Full Walkthrough

Worked Example: Auto Accident in Florida

A moderate-severity rear-end collision in Miami-Dade County. Plaintiff has $150,000 in economic damages, 10% comparative negligence, and 85% liability strength. Here is how every step of the pipeline applies:

Step 1 — Economic Damages$150,000
Step 1 — Severity (Moderate 2.5x)+$375,000 non-econ
Step 1 — Base Damages$525,000
Step 2 — Liability (85% x 0.90)x 0.765 = $401,625
Step 3 — Jurisdiction (FL 1.50x)x 1.50 = $602,438
Step 3 — Trial Risk (0.61)x 0.61 = $367,487
Step 4 — Black Swan (none)x 1.00 = $367,487
Step 5 — Scenario-Weighted EV$246,216
Step 6 — Monte Carlo P50$238,000
Step 7 — Bayesian Adjustment$242,500
Step 8 — Risk Discounts (x 0.829)$201,033
Step 9 — Benchmark Check (pass)$201,033
Step 10 — Final EV$201,033
P10 Floor / P90 Ceiling$105,000 / $380,000
Settlement Recommendation$170,878

The final settlement recommendation ($171K) is 33% of the initial base damages ($525K). Each step of the pipeline applies real-world risk adjustments — liability uncertainty, jurisdiction effects, trial risk, procedural threats, and settlement norms — that sophisticated attorneys will recognize from their own practice.

See It in Action

Run your own cases through the full 10-step pipeline. Every calculation is transparent and auditable.