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Cognitive Errors In Ligation

by Don Philbin
May 2010

From the Disputing Blog of Karl Bayer, Victoria VanBuren, and Holly Hayes.

Don  Philbin

As a student of decision errors in litigation, I was happy to see another empirical study come out this week confirming what we already know with increasing confidence – even well-trained lawyers are subject to the cognitive errors that throw humans’ calibrations off target. We all have to be confident to get out of bed. Parties assigned to buy or sell a house, car, or lawsuit reach different valuations depending simply on which side of the trade they are assigned. And if we think we have some measure of control over the outcome, of course our chances of reaching it are increased. Add to that the ethical obligation of zealous advocacy and you have the caldron from which overly optimistic case assessments flow.

In Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes, four psychologists (one is also a law professor) make a series of observations based on collected research and their own sample of 481 attorneys across the country. Each attorney was asked to state a minimum goal for cases set for trial in six to 12 months, and to self measure their confidence in reaching that outcome. The well-written statistical paper dove into the following areas:

  • people establish goals
  • they assess the probability of achieving those goals
  • lawyers make predictions in their cases
  • litigation is risky, time consuming, and expensive
  • decision errors can be costly for the lawyer and client
  • attorney’s estimate of the probability of success is the most important variable in shaping the decision to settle or litigate a case
  • overconfidence is ubiquitous
  • overestimation is more common on more difficult tasks
  • lawyers need to feel and display overconfidence to attract clients
  • a certain outcome may seem more probable simply because of a desire to reach it
  • when an event is perceived to be controllable, overconfidence is even more likely
  • lawyers may underestimate the extent to which situational factors may rob them of the ability to control the outcome
  • 64% of female and 55% of male attorneys achieved their minimum goals
  • there was no difference in calibration accuracy based on lawyer experience
  • 18% of lawyers were very or somewhat disappointed with the case outcome, even though 43% failed to achieve their stated minimum goal
  • biased assessments came with high confidence
  • we anchor on first numbers – we make biased assessments and fail to adjust sufficiently for uncertainty, even when specifically asked to do so
  • merely imagining an event can increase subjective probability assessments that it will occur
  • mediators and other third-parties can help temper metacognitive biases

The authors agree in the context of litigation with another famous study: “It can be argued that people’s willingness to engage in military, legal, and other costly battles would be reduced if they had a more realistic assessment of their chances of success. We doubt that the benefits of overconfidence outweigh its costs.”

This study found clear evidence of unrealistic litigation goals with no calibration improvement when ask to consider case weaknesses that could derail those goals. Mediators and settlement counsel help offset these rosy assessments and tools are being developed that allow attorneys and parties to check their assessments against historical data and known decision error rates. More about that soon…

Biography


Don Philbin, J.D., M.B.A., LL.M., is an AV-rated attorney-mediator, adjunct professor of law, curator of www.ADRtoolbox.com, and president of Picture It Settled®. Picture It Settled® is Moneyball for negotiation. Our behavioral software has learned negotiating patterns from parties to thousands of litigated cases in a wide variety of jurisdictions and claim types. It uses that intelligence to make accurate predictions of where a negotiating round is headed in time for parties to act on that intelligence using the program’s planning tools. The planning tools allow users to fine-tune their target settlement and project what impact a particular move might have on the round before making it. The result is more settlements on more advantageous terms.

Don was named the 2014 “Lawyer of the Year” for Mediation in San Antonio by Best Lawyers®, was recognized as the 2011 Outstanding Lawyer in Mediation by the San Antonio Business Journal, is one of seven Texas mediators listed in The International Who’s Who of Commercial Mediation, and is repeatedly listed in:The Best Lawyers in America, Texas Super Lawyers, The Best Lawyers in San Antonio, and the U.S. News and Best Lawyers “Best Law Firm” survey. He is an elected fellow of the International Academy of Mediators, the American Academy of Civil Trial Mediators, and the Texas Academy of Distinguished Neutrals.

 



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Website: www.adrtoolbox.com

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