Forecasting Litigation Outcomes
In the months leading to the Presidential Election of 2012, Nate Silver of The New York Times correctly predicted the outcomes of both the Presidential and the individual Senate elections. Silver’s feat was all the more remarkable because some professional pundits and strategists made such a hash of their predictions. “How did Silver do it?” journalists often wondered.
The secret lay not in some special genius that Silver possesses about political elections. Rather, his secret was to plug relevant information into a statistical model that he had developed which churning out new predictions as new information became available. If Silver has any special talent, it can be found in his ability to construct the model and to evaluate the reliability and weight of the information he feeds into it.
Can we do something similar with respect to the financial value of lawsuits? Is it possible to predict litigation outcomes with greater accuracy than we currently achieve?
I believe it is. The Win Before Trial Method of Case Valuation and the Case Value & Risk Analyzer™ help make this possible.
Remember Dick Morris, who predicted with near certainty even on election night that Mitt Romney would win by a “landslide?” Well, sad to say, most of us are like Dick Morris, at least some of the time. Few can claim the accuracy of Nate Silver.
Several independent studies have shown that lawyers—like auditors, physicians, money managers, political scientists, and almost all other professionals—consistently make inaccurate predictions while simultaneously thinking that their predictions will be on the money. The phenomenon is called the Overconfidence Bias; it is as much a part of our mental equipment as our ability to hear sounds and to see colors.
In his magisterial book, Beyond Right and Wrong: The Power of Effective Decision Making for Attorneys and Clients, Randall Kiser shares the results of two studies of thousands of cases, one in California and the other in New York, showing that about 60% of plaintiffs and 24% of defendants got worse results at trial than they could have achieved by accepting the last settlement proposal—not counting the additional time, money, and grief it cost to get a final judgment.
Wanting to understand misprediction better, Philip Tetlock embarked on a 20-year longitudinal study of the public predictions of social scientists. The results confirmed the persistence of the overconfidence bias. No surprise there. But Tetlock dug deeper and found a distinction between two types of cognitive styles, which he labeled hedgehogs and foxes, taking the labels from an essay by Isaiah Berlin, who in turn took his inspiration from a fragment from the Greek poet, Archilochus: “The fox knows many things, but the hedgehog knows one big thing.”
Tetlock described the diffence in cognitive styles as follows: “The intellectually aggressive hedgehogs knew one big thing and sought, under the banner of parsimony, to expand the explanatory power of that big thing to ‘cover’ new cases; the more eclectic foxes knew many little things and were content to improvise ad hoc solutions to keep pace with a rapidly changing world.”
Or as the late master litigator John Tucker once put it when speaking with colleagues at Jenner & Block, lawyers who play both sides of the street, representing plaintiffs and defendants promiscuously in, say, civil rights cases, tend to have better judgment about each case than those who specialize and represent only one type of client. The first are foxes, the latter hedgehogs.
Tetlock found that all social scientists in his study displayed the overconfidence bias. But foxes were much less afflicted by it than were hedgehogs. In other words, it pays to know many things. Having multiple perspectives on the matter under consideration helps calibrate our predictive judgments.
The Win Before Trial Method of Case Valuation
Enter the Win Before Trial Method of Case Valuation (The WBT Method) and the Case Value Analyzer™. Both constitute a way for hedgehogs to think more like foxes and for foxes to be better foxes.
The WBT Method breaks down the net present financial value of the case into four main outcome predictions and their respective probabilities:
1. The probability that the judge/jury will find the defendant liable to the plaintiff.
2. The probability that some major contingency will occur that dramatically affects the viability of plaintiff’s case or disposes of it altogether (e.g., summary judgment, death of an undeposed indispensable witness, change in the law midstream [think Erie v. Tompkins]).
3. The weighted average of a range of possible damage awards.
4. The total remaining costs that each side will incur to get a final, executed judgment.
Various and many are the things that influence the values of each the four components. In most cases, the admissible evidence and the law will have the biggest effect on the probability of a liability finding and the amount of damages. The advocacy skills of the lawyers play a major role in the values of these components as well. But the composition and prejudices of the jury, the jurisdiction, the judge, the type of case, and much more can be factors as well.
11/26/2020 06:57:05 pm
Hi thanks ffor posting this
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