Assessing your litigation risk
At the start of any litigation, there are more questions than answers. Everyone involved wants to know "what's our liability?", "what's this going to cost us?", "how will this impact our reputation?", "what are the potential damages?", "how long will this go on?", "who might need to testify?", and on and on. Although not every question can be answered easily or quickly, there are ways to get your arms around some of key issues that will help with how you manage the case going forward. Watch our three-part series on litigation risk assessment to learn how.
In Part 1, Dr. Bill Kanasky explains what litigation risk assessment is and why its important.
In Part 2, Dr. Bill Kanasky explains what is assessed in a litigation risk assessment.
In the final part of this series, we discuss why its important to be able to predict damages ahead of settlement negotiations and trial prep.
Part 1: What is litigation risk assessment and why is it important?
Litigation risk assessment is
doing jury research very early in a case to determine what your level of risk
is so that you can handle that particular case correctly as the months and
years go by.
The problem that we often see is that a lot of the risk assessment is very elementary, very rudimentary, and not taking the scientific method or approach and it ends up being inaccurate. In other words, if you're a corporation or you're an insurance company and you figure out you have a really, really bad case, and three years has gone by, you don't have a lot of power to correct things.
However, in the first year of a case, if CSI can help tell you, "Hey, this is a winner, this is a loser," not only is it going to help you from a leverage standpoint, strategically in the case with how you handle it, but it's going to save you millions of dollars cause you're gonna make the right financial decisions on the way as well.
It's really two areas, it's liability and damages. Those are the two areas clients are always interested in. Liability is interesting because in some cases the corporation or the defendant is ... they're the only defendant, so we're trying to assess through our scientific research how jurors feel about the amount of responsibility they have, the amount of fault in a case, and to determine how is that affecting a damage award that may be awarded in the case as well. However, other times there's multiple defendants. So, then I have to allocate blame. That's really a very important issue because jurors will be given a verdict form by the judge to say, what percent of company A is responsible? What percent of company B and what percent of company C? If you have a very large verdict, that verdict's going to be split amongst those companies. So as company A, you want to figure out how much am I at fault here versus company B and company C. That information allows the company to make the right decisions going forward in the litigation.Part 3: Why is it important to be able to predict damages?
After we assess liability in the risk assessment, the next thing we have to do is we need to determine what's going to be the scientific predictable range of damages. That's very, very powerful information for negotiation purposes, meaning if you think you have a $20 million case but you actually have a $50 million case, that's going be a problem for the defendant going forward.
However, if you think you have $20 million case but we can show you scientifically it's only worth $8 million, that's going to change your negotiation strategy very, very deeply when it comes to negotiation or a mediation.
So finding out the true value of a case, not by looking at past verdicts, but actually testing that case in the venue with jurors from that community, that is the most scientific way to get an accurate damages prediction model.
Counter-Anchoring Damages is More Important than Ever