Saturday, August 09, 2008

New York Times previews study of how parties fared when they rejected settlement and went to trial

A study of outcomes for parties who rejected settlement and went to trial will be published in the September Journal of Empirical Legal Studies. In this preview, the New York Times touches upon some of the issues that cause parties not to settle.
Overall, the study reported plaintiffs got less in 61% of cases, while defendants paid more in 24% of cases. In 15% of cases the result fell in the range between the last demand and the last offer. Randall L. Kiser, a co-author of the study, said the lesson for plaintiffs is to not view the defendant’s offer as half a loaf. The study results suggest defendants' offers are the full loaf or more.

Another interesting observation is that uninsured defendants have a higher error rate. Defendants won’t bankrupt themselves in a settlement, even if they know a verdict will bankrupt them. The graphic attached to the article shows the stakes were much higher in the cases where the defendant fared worse. It would be interesting to look at how the outcome was measured. If it doesn't continue to collection, even more plaintiffs are making bad decisions.

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