An ever-alert member of the Blawgletterati, Jeff Seely, today forwarded a link to a WSJ — no, a NYT — article about the horrible risk of taking a case to trial.
The linkage prompted Blawgletter to have a look at Jonathan D. Glater’s piece, "Study Finds Settling Is Better Than Going to Trial", where Mr. Glater notes that "mistakes were made more often in cases in which lawyers are typically paid a share of whatever is won at trial." He observes that plaintiffs frequently reject settlement offers exceeding what a jury later awards them and also points out the now-common psychological understanding that people (defendants) hate to pay money more than they (plaintiffs) enjoy winning it.
We suspect a couple of things. First, that the reference to contingent fee cases — all of them in New York state courts — relates mostly to personal injury lawsuits and not to commercial disputes, in which rationality plays a greater role. And, second, that the plaintiff-side mistakes in going to trial result mainly from contingent fee clients’ (costless) incentive to roll the dice at their lawyers’ expense; also, to a lesser extent, the hourly lawyers’ incentive to keep billing.
We look ahead to reading the forthcoming paper in the Journal of Empirical Legal Studies. It should come forth in the September issue.
