Many years ago, Robert Fisher and William Ury coined the acronym ‘BATNA’ meaning “Best Alternative To A Negotiated Agreement.” It represents the available alternatives when a party is unable to negotiate an agreement. In the context of litigation, it often means going to trial.
Based on a study just published by Vanderbilt University Law School entitled “Blinking On the Bench: How Judges Decide Cases” by Chris Guthrie, Vanderbilt Law School, Jeffrey Rachlinski, Cornell Law School and Andrew J. Wistrich, U.S. District Court, Central District of California, going to trial may be a party’s Worst Alternative To A Negotiated Agreement or WATNA. The reason is that it seems (based on this research) that “. . . judges are predominately intuitive decision makers, and intuitive judgments are often flawed.” (Id. at 105). That is, judges often use their intuition to decide matters, and often times, that intuition is wrong.
In their introduction, the authors explain there are two tried and true methods of judging. The first, known as “formalist,” requires judges to “. . .apply the governing law to the facts of a case in a logical, mechanical and deliberative way.” (Id. at 102). The second approach, known as “legal realism”, allows judges to “follow an intuitive process to reach conclusions which they only later rationalize with deliberate reasoning. For the realist, the judge “decides by feeling, not by judgment; by “hunching” and not by ratiocination” and later uses deliberative faculties “not only to justify that intuition to himself but make it pass muster.” ” (Id.)
To conduct their research, the authors asked 295 Florida state court circuit judges five questions of which three were the Cognitive Reflection Test. That test asks in full:
1. A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?
2. If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets?
3. In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?
For the answers, see p. 110-111 of the study.
The results of the study reveal that “judges rely largely on intuition but sometimes override that intuition with deductive reasoning.” (Id. at 112). Further, judges tend to be influenced by the initial numeric estimates made to them. An example is the amount that a judge awards in damages after learning what had been the initial demand by plaintiff. (Id. at 119-123).
The study also found that judges often use “hindsight bias” or tend “to overestimate the predictability of past events.” “The bias arises from an intuitive sense that the outcome that actually happened must have been inevitable.” (Id. at 123). For example, learning the outcome of an event will influence a judge in her later assessment of a case. Thus, if a judge learns what happens to a case on appeal, she will tend to conclude that the result was inevitable.
In sum, the study concludes that judges rely heavily on intuition when making decisions on the bench and allow distractions to influence their decisions:
“When awarding damages, assessing liability based on statistical evidence, and predicting outcomes on appeal, judges seem inclined to make intuitive judgments. They are also vulnerable to such distractions as absurd settlement demands, unrelated numeric caps and vivid fact patterns.” (Id. at 127).
So. . . in your next mediation, you may want to pause and consider whether the settlement offer or demand being proposed is better or worse than a trial judge deciding the matter based on intuition (that may be faulty) and/or distractions that may or may not be relevant to your case.
. . . Just something to think about.