Monday, August 25, 2008

Cost of Not Settling



Parties in all law suits, which unfortunately, also include divorces, must make a decision to settle or litigate their case. There was an interesting article in the August 8, 2008, New York Times by Jonathan D. Glater entitled "The Cost of Not Settling a Lawsuit." See chart above and the entire article at
http://www.nytimes.com/2008/08/08/business/08law.html?ex=1375934400&en=dad0bb582570506d&ei=5124&partner=permalink&exprod=permalink. The article premise is "that is the clear lesson of a soon-to-be-released study of civil lawsuits that has found that most of the plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken that offer." It cites Randall L. Kiser, a co-author of the study. The study will be published in September issue of the Journal of Empirical Legal Studies.
See http://www.blackwellpublishing.com/journal.asp?ref=1740-1453&site=1. The study suggests that "lawyers may not be explaining the odds to their clients — or that clients are not listening to their lawyers." It goes on to say "Law schools do not teach how to handicap trials, nor do they help develop the important skill of telling a client that a case is not a winner. Clients do not like to hear such news." It concludes by saying "The findings are consistent with research on human behavior and responses to risk, said Martin A. Asher, an economist at the University of Pennsylvania and a co-author. For example, psychologists have found that people are more averse to taking a risk when they are expecting to gain something, and more willing to take a risk when they have something to lose. ‘If you approach a class of students and say, I’ll either write you a check for $200, or we can flip a coin and I will pay you nothing or $500,’ most students will take the $200 rather than risk getting nothing, Mr. Asher said. But reverse the situation, so that students have to write the check, and they will choose to flip the coin, risking a bigger loss because they hope to pay nothing at all, he continued. ‘They’ll take the gamble.’" Is there a lesson here for couples going thru a divorce? We often advise clients that it is better to choose the devil you know rather than the devil you don’t know. Clients often think they are right and therefor will prevail. Sadly for them, this usually does not happen. I like mediation because in most cases this dilemma can be avoided. As always, you can post any comment about this blog, Divorce Mediation, or Tucson Arizona by following the directions at the right in the green column or at the bottom of this website or participate in our Presidential poll located below the directions. WM 8/25/08

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