Counter-anchor or play it safe?
Five reasons to present an alternative damages figure
Many have implicated the anchoring effect as a factor driving excessive civil damages awards. A well-documented social psychological phenomenon, the anchoring effect refers to automatic over-reliance on an initial piece of information in decision-making tasks. This initial piece of information is often a number or dollar amount; for instance, the sticker price on a vehicle, the listing price for a home, or total amount of damages requested by a savvy plaintiff attorney.
The plaintiff’s bar has capitalized on this psychological tendency over the past several years. Plaintiff attorneys no longer hesitate to request tens or even hundreds of millions of dollars from the jury, and they do it as soon as possible. However, most defense attorneys hesitate to present an alternative damages figure, primarily because they fear the jury will interpret this as an admission of liability. Scientific research, social psychological theory, and common sense strongly suggest that the defense would be wise to present an alternative damages figure in the majority of cases (if permitted in the trial venue) and refrain from doing so only in unique circumstances. Not convinced? Here are five reasons why the defense should consider presenting an alternate damages figure:
1) Anchoring works, both outside and inside of the courtroom.
There is no dispute that anchoring is a very real and effective tactic. This is why most restaurant guests order the mid-priced glass or bottle of wine, even though that choice is almost always the lowest value for the price. Many civil jury decision-making studies demonstrate that plaintiff anchoring leads to higher jury awards. For instance, one study[i] presented the case facts involving a personal injury but manipulated the plaintiff’s damages request: either participants were told that the request was $100, $20,000, $5 million, or $1 billion. Although the requests for $5 million and $1 billion were objectively excessive, jurors still used these figures as anchor points and awarded higher damages according to the increasing demands. There are many other studies as well as countless actual trial outcomes replicating these findings, and both academic and applied researchers agree that plaintiffs benefit by requesting extreme amounts. The lesson is that plaintiff’s counsel will continue requesting exorbitant amounts and this will continue to work if left unchallenged.
2) Jurors do not typically punish plaintiffs for requesting an excessive award.
In the study cited above, jurors in each damages request condition (ranging from $100 - $1 billion) were asked about their perceptions of the plaintiff. Those told that the plaintiff asked for $1 billion were more likely to view the plaintiff as “greedy” and “selfish,” however, these jurors still awarded more money than their counterparts. Even though the excessive ask colored jurors’ perceptions of the plaintiff somewhat, it was inconsequential as the anchor worked as intended. Campbell and colleagues’ more recent study[ii] suggests that any reductions in the plaintiff’s credibility as a result of an excessive request are far outweighed by the likelihood of success in aiming high. Our record of post-trial interviews reveals that even jurors who had strong reactions of disbelief at plaintiff’s initial damages requests eventually accepted such requests as reasonable. Several noted, “When they (plaintiffs) showed us all of the categories and how everything added up, it just made sense.” The defense cannot continue to bet on the unlikely possibility that jurors will be so offended by the plaintiff’s request that they award significantly less or nothing at all.
3) Counter-anchoring works, both outside and inside of the courtroom.
Anyone who has participated in any sort of negotiation inherently understands that counter-anchoring can be a highly effective tactic. Academic experimental studies as well as actual trial outcomes indicate that presenting an alternate damages figure leads to lower jury damages awards when the defendant is found liable.[iii] Jurors are desperate for a frame of reference and any guidelines for awarding damages and non-economic damages in particular; it can be very dangerous for the defense if the only guidance jurors receive is from the plaintiff. It is understood that counsel is prohibited from suggesting a specific non-economic damages award in certain venues; where it is allowed, however, most jurors would greatly benefit from a defense perspective to help them navigate a very confusing decision.
4) Jurors do not interpret an alternative damages proposal as an admission of liability.
Academic and “real-world” research reveals that presenting an alternative damages figure the right way results in one of the following:
· Jury sides with defense; damages are no longer an issue.
· Jury sides with plaintiff and awards what the defense suggested.
· Jury sides with plaintiff and awards somewhere in between of what plaintiff suggested and what defense suggested.
· Jury sides with plaintiff and awards what plaintiff requested. Note: This is EXCEEDINGLY RARE.
There are no published studies in academic or applied realms documenting a case in which a defendant’s prudent presentation of an alternative damages model hurt the defense. Most often, it leads to a lower damages award if the jury finds the defendant liable. There is no evidence that it increases the likelihood of a finding against the defense. In fact, Campbell and colleagues found that presenting an alternative figure increased the likelihood of a defense verdict. There are minimal risks in countering the plaintiffs anchor as long as 1) There is no extreme credibility gap between plaintiff and defendant (such that defendant is perceived as significantly less credible); and 2) The defense can provide some logical rationale for its alternative proposal.
5) You cannot keep doing the same thing over and over expecting different results.
Early versions of this quote were attributed to Albert Einstein and later versions to Tony Robbins. Regardless of the source, the idea is timeless and particularly relevant to the defense bar in the face of ever-evolving plaintiff tactics. This is the time to fight fire with fire; our collective experiences working on hundreds of mock and actual trials over the past several years reveal that the defense is most successful when taking a proactive rather than a reactive approach.
Despite these findings, counsel and clients may continue to have doubts as to how an alternative damages figure will be received at trial. A mock trial or other carefully designed pre-trial research project provide the perfect opportunity to assess jurors’ reactions to a defense counter-anchor; moreover, carefully designed pre-trial research will always provide counsel and clients with a strategic advantage in negotiations and at trial. The real risk is in not conducting such research, and not involving a qualified Litigation Consultant who can provide the legal team with the leverage needed to prevail.
[i] Chapman, G. B., & Bornstein, B. H. (1996). The more you ask for, the more you get: Anchoring in personal injury verdicts. Applied Cognitive Psychology, 10, 519-540.
[ii] Campbell, J., Chao, B., Robertson, C., & Yokum, D. V. (2015). Countering the plaintiff’s anchor: Jury simulations to evaluate damages arguments. Iowa Law Review, 101, 543-571.
[iii] For a review, see Greene, E. & Bornstein, B. H. (2003). Determining Damages: The Psychology of Jury Awards. Washington, D.C.: American Psychological Association.
Counter-Anchoring Damages is More Important than Ever