The Two Parts of Effective Litigation Risk Assessment
There are many significant economic issues surrounding any individual case’s value in terms of damage awards. Involved parties may often have a litany of questions, such as "what's our liability," "what’s the potential damage,” and "how long will this go on?” Only some questions can be answered easily or quickly, but there are ways that companies can identify key issues to help them manage the case going forward. In particular, an effective litigation risk assessment can provide a company with a scientific evaluation of the risks and potential costs associated with a specific case early in the process, helping them maximize settlement and verdict outcomes.
What is the ROI of Litigation Risk Assessment?
Early research produces valuable data to drive critical settlement negotiations and trial strategy decisions, resulting in better financial outcomes. Our scientifically-valid research delivers invaluable insights, eliminating guesswork and avoiding nuclear outcomes.
What is Litigation Risk Assessment, and Why is it Important?
Litigation has the potential to impose substantial risks and costs to the participants involved, both tangible costs as well as those that are intangible. Litigation takes time, may cause loss of other opportunities, and the risk to personal and business reputations and outcomes can be devastating. Litigation risk assessment involves conducting jury research very early in a case to determine your risk level so that you can handle that particular case in the most advantageous way as the months and years go by.
As crucial as litigation risk assessment is, all too often, a significant amount of the risk assessment that is taking place is very rudimentary. Additionally, the risk assessment may be wildly inaccurate without a scientific approach to research strategies. As the litigation continues, if a company has taken that poor advice, it may get too far down the road to be in a position to correct things.
However, with Courtroom Sciences’ Ph.D.-level litigation research and psychology professionals, companies get litigation risk assessment where the research is designed and implemented correctly. The prediction of not only liability but also damages is possible on a level that far surpasses the accuracy of “guesses” or “hunches” and, in many cases, is surprisingly accurate. The investment of time and dollars into jury research has demonstrated over and over that guessing is far more expensive than the research.
What is Assessed in a Litigation Risk Assessment?
Effective litigation risk assessment is primarily focused on two areas: liability and damages. These are the two key areas in which most companies are generally interested.
Part One: Liability
The first part of the litigation risk assessment is the liability portion. In some cases, the company may be the only defendant. In these cases, scientific research seeks to determine how jurors feel about the amount of liability, or the amount of responsibility or fault, they have in that case. In other instances, there might be multiple defendants. In these cases, the judge would ask jurors to determine what percent each defendant is responsible for. In these occasions, litigation risk research would be used to understand the allocation percentages of blame for each defendant.
Part Two: Damages
The second part of litigation risk assessment is concerned with damages. In cases where a corporation is a lone defendant, after assessing the company's liability, it also needs to be determined how that may affect the amount of damages awarded. In instances with multiple defendants, a company will want to know how a verdict may be split among those companies, particularly if it is estimated to be a large verdict. A scientifically sound estimate of liability and potential damages allows a company to make informed decisions in litigation.
Why is it Important to be Able to Predict Damages Ahead of Settlement Negotiations and Trial Preparation?
The ability to have a scientifically predictable range of damages is extremely powerful information for negation purposes. For example, suppose a company is under the impression that they have a $20 million case, but a jury believes it to be a $50 million case. That situation would be a severe problem for the defendant going forward. On the other hand, if you think you have a $20 million case, but a litigation risk assessment can show you scientifically that it's only worth $8 million, that has the potential to change your strategy significantly when it comes to settlement negotiations or mediation.
One of the reasons there is such a large swing between the assumed value of a case and the true value is that case valuations are often calculated using gut instinct, ‘similar cases’ or jury verdicts and settlements obtained from online databases. However, each case has its specific aspects that are rarely duplicated, and these methods are inferior to a science-based method that uses empirical data.
Finding out the true value of a case by testing that specific case in the venue with jurors from that community is the most scientific way to get an accurate damages prediction model. At Courtroom Sciences, our scientifically-valid research delivers invaluable insights, providing the most predictive estimates of litigation risk and exposure to use for deriving settlement strategies and decisions.
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● Effective litigation risk assessment is primarily focused on two areas: liability and damages.
● An effective litigation risk assessment can provide a company with a scientific evaluation of the risks and potential costs associated with a specific case.
● The ability to have a scientifically predictable range of damages is extremely powerful information for negation purposes.
● Courtroom Sciences’ scientifically-valid research provides the most predictive estimates of litigation risk for deriving settlement strategies and decisions.
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