Litigation Risk Assessment: A Tool to Enhance Negotiation

Abstract

Without clear projections about where the path of litigation is most likely to lead, clients can be anchored in unrealistic expectations about the outcome and the costs of getting there. Fundamental to the lawyer's ethical role is the obligation to provide transparent information about legal rights and risks, and fundamental to settlement processes is the presumption of informed decision-making. This paper explores how thorough predictions are often missing in the way that lawyers and clients negotiate. Drawing on a recent study of lawyers and law students, it summarizes a simple framework for litigation risk assessment. Using examples, it then examines how it can be used to support the pursuit of settlement: grounding the negotiator and client with a well-prepared reference point (BATNA) and reducing adversarial posturing. The author seeks to contribute to the development of best practices around the use of risk analysis, and the quest for more responsive and earlier settlement outcomes for clients.

Keywords: informed-decision making, framework for litigation risk assessment, pursuit of settlement, reducing adverserial posturing