Crowdsourcing & Data Analytics: The New Settlement Tools

Abstract

By protecting the right to a jury, the State and Federal Constitutions recognize the fundamental value of having civil and criminal disputes resolved by laypersons. However actual trials are relatively rare, in part because parties seek to avoid the risks and cost of trials, and courts seek to clear dockets efficiently. Even as settlement may be desirable, it is sometimes difficult to resolve a dispute. Parties naturally view their cases from different perspectives, and these perspectives often cause both sides to be overly optimistic, seeking unreasonably large or unreasonably small resolutions.

This article describes a novel method of incorporating layperson perspectives to provide parties more accurate information about the value of their case. Specifically, we suggest that working with mediators or settlement judges, the parties should create mini-trials and then recruit hundreds of online mock jurors to render decisions. By applying modern statistical techniques to these results, the mediators can show the parties the likelihood of possible outcomes and also collect qualitative information about strengths and weaknesses for each side. These data will counter the parties’ unrealistic views and thereby facilitate settlement.

Keywords: settlement, crowdsourcing, optimism bias, courts, alternative dispute resolution

JEL Classification: K41