Psychology, economics, and settlement: A new look at the role of the lawyer

Approximately 90% to 95% or more of civil lawsuits not dismissed by courts in the early stages of litigation settle short of trial. The traditional law and economics model of litigation suggests that this is readily predictable. This model assumes that litigants seek to maximize their wealth through...

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Bibliographic Details
Published in:Texas law review 1997-11, Vol.76 (1), p.77-77
Main Authors: Korobkin, Russell, Guthrie, Chris
Format: Article
Language:English
Subjects:
Attorneys
Civil actions
Costs
Decision making
Disputes
Economics
Evidence
Expected utility
Expected values
Experiments
Law
Psychology
Roles
Settlements & damages
Studies
Trials
United States
Value analysis
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Summary:Approximately 90% to 95% or more of civil lawsuits not dismissed by courts in the early stages of litigation settle short of trial. The traditional law and economics model of litigation suggests that this is readily predictable. This model assumes that litigants seek to maximize their wealth through the legal system, and that they pursue this goal in a consistent, rational way. But the model's basic assumptions of wealth maximization and completely rational behavior ring hollow in the ears of lawyers who have observed the behavior of litigants. The model's assumptions are also undermined by a growing body of empirical evidence demonstrating that litigants often make decisions in ways that depart from these paradigms. A paper provides experimental evidence supportive of the hypothesis tat lawyers as a class share an analytical orientation to decision-making that can facilitate a higher rate of settlement than behavioral scientists would expect litigants to negotiate on their own.
ISSN:0040-4411
1942-857X