By Dr. Ken Broda Bahm:
“Shoot for the moon,” that motivational saying goes, “and even if you miss, you’ll land among the stars.” Sounds nice, until the cynics (the kind who write demotivational posters) add, “…and die in the cold abyss of space.” Both the feel-good and the sarcastic versions of that sentiment have a parallel in the psychology of plaintiff noneconomic damages requests. Based on the research showing our powerful tendency to “anchor” on a number, plaintiffs have a good reason to aim high when suggesting a number. They won’t always get every dollar, the reasoning goes, but they will generally end up better off than if they hadn’t shot for the moon. A robust body of research shows that. But there are a few important questions riding along with that: Is there a danger of losing credibility by asking for a figure that is so high that it’s an inevitable miss? And what about defendants: should they ignore the number, attack the plaintiff’s optimism, or counter with their own more grounded figure?
Different defense attorneys will give different answers based on their own experience and the uniqueness of each case. A strategy of avoiding a number to steer clear of an apparent concession of liability could be a valid strategy when the defense is overwhelmingly strong on liability…if those kinds of cases still go to trial. In the more likely scenario where it is a close call, most in the social science field will advise that it is much better to counter. That is what a new study (Campbell et al., 2014) also shows. The reactions of 776 research participants to a short mock trial video that varied both the plaintiff’s pain and suffering request, as well as the defendant’s response strategy shows several things: One, it confirms that plaintiffs do well to anchor high, even to the point of going overboard; and two, it shows that the defense is generally better off countering that number, rather than ignoring it or attacking its credibility. This post takes a look at the study, as well as its implications.
The Question: Three Effects, Which One Wins?
Social science results don’t always point in the same direction. Sometimes there are conflicting effects, and the question is, “Which effect is stronger?” The three effects compared in the new study (Campbell et al., 2014) are as follows:
The Anchoring Effect
Will the plaintiff who requests a million for pain and suffering do better than the plaintiff who simply says “you decide”? Yes. Jurors, along with the rest of us, are strongly influenced in numerical judgments when we’re given a number to start with. This is a very robust effect supported in a long line of studies (nicely summarized in the research article).
The Credibility Effect
Will a clearly overboard damages request hurt a plaintiff’s credibility to the point that it adds to the risk of loss on liability? Referred to as the “Straight Face Test,” it’s been up to this point, more a matter of conventional wisdom than social science research. But adding in the demonstrated tendency of jurors to fuse their thinking on damages and liability, it stands to reason that a loss of credibility in one area could effect the other area.
The Concession Effect
Do defendants risk increasing their chances of a loss when they offer their own number on damages, because doing that appears to concede or show weakness on liability? The limited research is a little murky on this point with some studies showing an effect and some not. In clear cases, the thinking is, it can be a bad idea to risk that soft concession. But in cases where it remains a reasonable possibility that jurors will get to the damages discussion, defendants shouldn’t let the plaintiff be the only party who is talking numbers.
The Study: The Anchor is Heaviest, but the Counter Still Counts
Where this study improves on previous work is comparing the effectiveness of various defense approaches in response. Using a stimulus that is more realistic than most prior studies (a 33-minute video is better than a paper description), and a large sample of 776 online participants, the team created attorney summary arguments that were identical aside from one manipulation on the plaintiff’s side (giving an anchor of either $250,000 or $5,000,000 for pain and suffering), and one manipulation on the defense side (ignoring the damages number and arguing liability only; attacking the plaintiff’s number but not countering; and countering with their own damages number while still contesting liability). Combining the two plaintiff versions with the three defense versions to create five scenarios, they looked at the resulting verdicts and damages to see what worked.
In that horse race, we do have a winner. Anchoring, or the simple power of asking for more, is a strong enough effect to outstrip the other two. Adding their own results to the body that preceded it, the authors conclude that, “Research to date suggests that no anchor is too high. Instead, the more a plaintiff asks for, the more he or she gets.” Among the defense strategies, offering a counter was best. It wasn’t enough to outstrip the plaintiff’s advantage in asking for a high number to begin with, but it turned out to be a better strategy than either ignoring or attacking the plaintiff’s numbers.
The Implications
Plaintiffs: Shoot High
On economic damages, the numbers will be limited by facts. But on those noneconomic areas and punitives, then it helps empirically and emphatically to get them thinking of a larger number. They’ll adjust it down in nearly all cases, but the initial anchor provides an influential starting point. In this research, there was a small credibility effect (asking for the larger amount reduced the plaintiff win rate by around seven percent), but mathematically, plaintiffs were still better off going for the bigger number. The expected value of the case was eight times greater when the plaintiff provided a $5 million anchor instead of a $250,000 anchor on pain and suffering.
Defendants: Counter that Shot
The defendant’s best response to a high anchor in this study was to counter with a number of their own. Suggesting $50,000 as the right number resulted in an expected case value that was 43 percent lower. And the most interesting finding is that the defendant gained this advantage without a “concession effect” cost on liability. In fact, the scenario in which the defense had the greatest chance of winning on liability was the one where the defense countered with its own number. When the defense ignored the plaintiff’s number, its win rate on liability actually declined by nearly 20 percent.
Researchers: Keep Looking
One finding that seemed to frustrate the research team, and should frustrate defense attorneys as well, is that while countering is better than not countering, there is still no effective answer to the substantial advantage plaintiff gains simply giving a higher anchor. Researchers should clearly keep looking at this area. One clear way that the study could be improved would be to look at actual deliberations and not simply juror’s individual opinions. In this study, they used mathematically combined “jury” groups rather than physical discussions among the participants. As the authors acknowledge, an individual reaction isn’t the same as a group reaction. They mention one realistic study showing that the mean of individual verdicts was nearly five times the mean of jury deliberation verdicts on the same case. The team used median rather than mean (to avoid skewing the average), but the problem in not capturing the group dynamic persists. A defense strategy of attacking the overkill and the credibility of plaintiff’s numbers, either with or without a counter of their own, should be investigated in that way. That attack strategy could be more effective in a group context, to the extent that the defense arguments equip those jurors predisposed to doubt the high numbers with more effective ways to argue against them, potentially convincing other jurors.
For now, however, plaintiffs are still right to aim for the moon, with the knowledge that this increases the chances they’ll at least land among the stars. And even if defendants can’t fully overcome that advantage altogether, they are still able to pull them into a lower orbit by pointing to lesser stars of their own.
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Other Posts on Damages:
- When Arguing Damages, “Drop Anchor” Even in Murky Waters
- Spot the Jurors Who Feel Entitled to Award HigherDamages
- Expect Jurors to Want to Follow the Money
Campbell, J. E., Chao, B., Robertson, C. T., & Yokum, D. V. (2014). Countering the Plaintiff’s Anchor: Jury Simulations to Evaluate Damages Arguments.Available at SSRN 2470066.
Image Credit, Copyright: tassel78 / 123RF Stock Photo. Used under license.