Monday, January 25, 2021

Addressing Confirmation Bias in Mediation

Confirmation bias is the innate human tendency to look for and interpret information consistent with one’s existing beliefs and to ignore inconsistent information, even if that information is demonstrably true. A trial witness’ devastating demonstration of confirmation bias is the climax of the recent, popular HBO mini-series, The Undoing. While exposing the harm caused by a party’s failure to face damaging facts makes excellent court room drama, in real life, advocates have the ethical obligation to do their best to ensure their clients fully appreciate the risks inherent in their legal dispute well in advance of trial.

However, adverse risk analysis also can be challenging for attorneys, due to their natural confidence in their own skills and a proven tendency of trial lawyers to be unrealistically optimistic about their likely success. While such overconfidence may be natural, overconfidence does not guarantee success. A recent article in the Miami-Dade, Florida Daily Business Review offered a stark example of seasoned trial counsel’s failure to accurately predict the outcome of litigation. Pretrial, the defendant’s “gold standard defense” team estimated the worst-case damage estimate at $1.5 million. The jury disagreed, awarding the plaintiff $72.9 million.

Outside counsel’s preparation of a client for mediation should be a perfect opportunity to ensure the client appreciates the risks of proceeding to trial, especially any risks the client might not welcome or want to credit as being inconsistent with its opinion as to the validity of its claims or defenses.  One way for both counsel and a client to more accurately assess litigation risk in the face of inherent biases is to jointly engage in a formal, disciplined identification of those aspects of the case about which the parties and counsel have little control, and to assess the consequences if these risks do not proceed as hoped.

Such considerations will vary, but might include:
Jury issues such as:
• Undisclosed juror bias or cultural considerations or the possibility of not seating a jury with the sophistication and objectivity to resolve complex or emotionally charged issues, especially given the limited number of pre-emptory strikes.
• In a lengthy trial, jurors may stop listening to the defense, because they already believe the plaintiff’s case (which is another example of the risk of confirmation bias) – or the reverse: that the jury will only remember the witnesses they heard most recently.
• The possibility that a juror will research the case or issues on the Internet and, based on adverse publicity, reach a decision unrelated to the trial evidence?

Evidentiary issues such as:

• Losing an important in limine motion. 
• The possibility that the client’s fact or expert witnesses may unexpectedly under-perform, become unavailable, or otherwise are compromised by undisclosed testimony in other cases or unforeseen credibility lapses.

• Unexpectedly overperforming opposing witnesses.

• The difficulty and possibly boring nature of having to present evidence in a lengthy, virtual hearing.

• The risk in multi-party cases, such as construction disputes, that parties necessary to your client’s case may settle before or at trial, leaving your client to present its case alone.

Judicial issues, including:
• Judicial bias, undisclosed or not.
• Unfavorable jury instructions or special verdict form.

Post-trial issues:

• The risk of bad publicity.

• The financial risk of an adverse judgment on other client agreements or relationships.

• Uncollectability of your client’s anticipated, successful money judgment or fee award.

• Unfavorable result on appeal, including the cost of retrial.

Mediation offers a unique challenge to outside counsel to provide their clients the valuable and, indeed, indispensable service of rationally identifying and evaluating the merits and risks of their side of a dispute. Undergoing a disciplined process of identifying and analyzing messy and unwelcome facts as part of mediation preparation should help clients face unpleasant truths. Only then can the client feel confident in deciding whether the other side’s settlement offer really is a better alternative to trial.

Author Patricia H. Thompson, Esq., FCIArb, is  a full-time neutral at JAMS, with experience conducting virtual and in-person mediations, arbitrations and other ADR proceedings in construction and other complex commercial disputes.

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