Wednesday, June 23, 2010

Decision Making in Settlement and Litigation

When attorneys and their clients decide whether to settle and for how much, they try to predict how things will turn out if they go to trial, hoping, of course, to do better. In a study of thousands of civil cases, researchers found that attorneys were very often wrong. Three-fifths of plaintiffs and a quarter of defendants got a result at trial that was worse than the settlement they could have had. The cost of the error was much greater for defendants: plaintiffs' average error was $43,100, but defendants' average error was $1,140,000. Randall L. Kiser, Martin A. Asher, and Blakeley B. McShane, Let’s Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations, 5 J. Empirical Legal Studies 551, 566 ((2008).

Now the lead author of that study -- a consultant and former litigator -- has written a book aimed at lawyers and law students to help them see the problem of bad decision making and learn ways to improve it. Randall Kiser, Beyond Right and Wrong: The Power of Effective Decision Making for Attorneys and Clients, K126.K57 2010 at Classified Stacks. The book presents research studies to support its recommendations. As the author puts it:

This book differs from other books and articles on settlement negotiations in that it places greater weight on scientific evidence than the war stories of attorneys, mediators and judges; it assumes that empirical studies are more instructive than anecdotes and statistics are more dependable than surmise.
p. 5. But Kiser goes easy on his audience by presenting the social science without "probability theory, regression analysis, game theory," and so on "for a simple reason: attorneys generally don't like them, don't understand them and won't use them." So the book is a practical, how-to work backed by scholarship (but not weighed down by it).

It should be of interest for professional responsibility as well as trial practice and alternative dispute resolution.

1 comment:

Anonymous said...

This is so true. My worst: a settlement offer of $30K, followed by a defense verdict.