67 Pages Posted: 18 Jul 2013 Last revised: 19 Oct 2013
Date Written: July 17, 2013
Most lawsuits settle, but some settle later than they should. Too many compromises occur only after protracted discovery and expensive motion practice. Sometimes the delay precludes settlement altogether. Why does this happen? Several possibilities — such as the alleged greed of lawyers paid on an hourly basis — have been suggested, but they are insufficient to explain why so many cases do not settle until the eve of trial. We offer a novel account of the phenomenon of settling on the courthouse steps that is based upon empirical research concerning judgment and choice. Several cognitive illusions — the framing effect, the confirmation bias, nonconsequentialist reasoning, and the sunk-cost fallacy — produce intuitions in lawyers that can induce them to postpone serious settlement negotiations or to reject settlement proposals that should be accepted. Lawyers’ tendencies to rely excessively on intuition exacerbate the impact of those cognitive illusions. The experiments presented in this Article indicate that the vulnerability of experienced lawyers to these cognitive errors can prolong litigation.
Suggested Citation: Suggested Citation
Wistrich, Andrew J. and Rachlinski , Jeffrey J., How Lawyers' Intuitions Prolong Litigation (July 17, 2013). Southern California Law Review, Vol. 86, No. 571, 2013; Cornell Legal Studies Research Paper No. 13-91. Available at SSRN: https://ssrn.com/abstract=2295063