Negotiating a settlement that will please your client often requires more than a persuasive argument. In “Mind Control: The Psychology of Settlement, How to Get What You Want” during the ABA Annual Meeting in New York, panelists introduced attendees to the psychological aspects of settlement decision making that can help lawyers gain an edge in negotiations.
Attendees of the session on effective settlement negotiations learn how psychology and game theory can help.
Whether your client is a plaintiff or defendant often predetermines whether she will be a risk taker or be risk adverse.
Consider this hypothetical scenario:
A defendant has two options. He can pay a $400 fine or go to trial with the possibilities of either paying a potentially larger amount or walking away with no fine at all. Most of the time, defendants select the latter option since they will probably lose money with either choice they make.
The plaintiff has two options, as well. She can accept a guarantee of $400 or risk getting nothing at all with a trial that may or may not offer a larger sum. People in this situation are most likely to keep the $400.
Research supports these assumptions. When a client expects to pay-out, he is more likely to pursue risk. However, a client who expects to gain money will tend to be risk adverse. How lawyers present clients with their settlement options can mitigate these assumptions.
When considering the pursuit of a settlement, it is important to map out the potential outcomes for clients. Study the losses and gains of past cases, then present the available options and the risks involved using your research to help clients make decisions. Be aware of other factors that may affect the outcome of a settlement case, such as the granting of a Daubert motion, which may exclude the use of an expert witness. Without an expert witness, a case argument may not be as strong.
In creating outcome and risk estimates, panelists advised lawyers to examine the ruling tendencies of the presiding judge. For example when factoring the impact of a Daubert motion, research on the presiding judge may indicate whether she is likely to deny or accept the motion.
Software is available to help lawyers map these situations. One suggested tool, TreePlan, is an add-in to Microsoft Excel.
Program panelists included: Philip Anthony, Marlborough, Mass.; Michael Lewis, Washington, D.C.; and Edward Rosenthal, Philadelphia. Susan Farina, Marlborough, Mass., moderated the session.
"Mind Control: The Psychology of Settlement, How to Get What You Want" was sponsored by the Tort Trial and Insurance Practice Section.