Litigation Risk Assessment: A Tool to Enhance Negotiation
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LITIGATION RISK ASSESSMENT:
A TOOL TO ENHANCE NEGOTIATION
Michaela Keet*
I. INTRODUCTION
Comparisons between final settlement offers and trial out-
comes raise serious questions about whether lawyers and clients
are making good decisions in the litigation process.! Litigation in-
volves the exercise of judgment in complex situations with multiple
uncertainties, where common psychological decision-making biases
are sure to have influence.2 Without clear projections about where
the path of litigation is most likely to lead, clients can be anchored
in unrealistic expectations about the outcome and the costs of get-
ting there.3 Fundamental to the lawyer's ethical role is the obliga-
tion to provide transparent information about legal rights and
risks,' and fundamental to settlement processes is the presumption
* Associate Professor, College of Law, University of Saskatchewan. This paper arises out of
a larger study on risk assessment, completed with Professor Heather Heavin, also of the College
of Law, University of Saskatchewan.
1 U.S. empirical studies show significant rates of decision error. See Samuel R. Gross &
Kent D. Syverud, Getting to No: A Study of Settlement Negotiations and the Selection of Cases for
Trial, 90 Micit. L REv. 319 (1991); Samuel R. Gross & Kent D. Syverud, Don't Try: Civil Jury
Verdicts in a System Geared to Settlement, 44 UCLA L. REv. 1 (1996); Jeffery J. Rachlinski,
Gains, Losses, and the Psychology of Litigation, 70 S. CAL. L. REV. 113 (1996); Randall L. Kiser
et al., Let's Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement
Negotiations, 5 J. EMPIRICAL LEGAL STUD. 551 (2008); RANDALL KISER, BEYOND RIGHT AND
WRONG: THE POWER OF EFFECTIVE DEcisION MAKING FOR ArORNEYS AND CLIENTs (2010)
[hereinafter KISER, BEYOND RIGHT AND WRONG].
2 Andrew J. Wistrich & Jeffrey J. Rachlinski, How Lawyers' Intuitions Prolong Litigation,
86 S. CAL L. REv. 101 (2013). See generally DANIEL KAHNEMAN, TINKINo FAST AND SLOW
(2011); HEURISTICS AND BIASES: THE PsYCHOLOGY OF INTUITIVE JUDGEMENT (Thomas Gilo-
vich et al. eds., 2002); and Heather Heavin & Michaela Keet, Skating to Where the Puck Will Be:
Exploring Settlement Counsel and Risk Analysis in the Negotiation of Business Disputes, 76 SASK.
L. REV. 191, 203 (2013).
3 Dan Orr & Chris Guthrie, Anchoring, Information, Expertise, and Negotiation: New In-
sights from Meta-Analysis, 21 01110 ST. J. Disp. RESOL. 597 (2005-2006); John Richardson, How
Negotiators Choose Standards of Fairness: A Look at the Empirical Evidence and Some Steps
Toward a Process Model, 12 HARV. NEGOT. L. REv. 415 (2007). For a discussion about overcon-
fidence as a stage in the normal cycles of arousal and tension, and how it impedes settlement, see
Elizabeth E. Bader, The Psychology and Neurobiology of Mediation, 17 CARDOZO J. CONFLIcr
ResoL. 363 (2016).
4 Stephen G.A. Pitel, Counseling and Negotiation, in LAWYERs' ETHIS AND PROISSIONAL
REGULATION (Alice Woolley et al. eds., 2d ed. 2012). Alice Woolley has suggested that the duty
of honesty and candor requires lawyers giving advice to engage in reasoned explanation of their
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Litigation Risk Assessment: A Tool to Enhance Negotiation
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