By Dr. Ken Broda Bahm:
As a litigation consultant with an academic background, I am in a unique position: I stay abreast of the social science research (the blog schedule makes sure of that), but I also spend my days working with trial lawyers on the practical needs of cases going to trial. From that vantage point, I’ve observed that practice often proceeds independently of research. In other words, lawyers do what their own experience and hunches tell them to do, regardless of whether the social science supports it or not. One example off that disconnect relates to per diem demands. Where plaintiffs are allowed to translate their requests for noneconomic damages like pain and suffering into a specific amount per day, per hour, or per minute (Latin notwithstanding, those are all called “per diem”), they will generally do so in the belief that this strategy yields higher damages.
But does it? The question has been notoriously under-researched, with just the second study on the effects of a per diem demand coming out this past year (Campbell, Chao, & Robertson, 2017). In this study, legal professors from the University of Denver and the University of Arizona used realistic video-recorded trial scenarios involving a medical failure to diagnose case in order to see whether the way of asking for noneconomic damages — lump sum requests and/or per diem requests — had the effect of increasing the amount of damages awarded. The answer was a bit nuanced, ultimately confirming the wisdom of breaking numbers down into a per diem, but not for the reasons that are commonly assumed. In this post, I’ll take a look at what the research has to say to courts on whether per diems should be allowed, and also at what it says to plaintiffs and defendants on how they should use or react to the strategy.
The Common Question: Do Per Diems Uniquely Increase Awards?
The assumption within the courts, and specifically within the 13 states that prohibit per diem arguments on noneconomic damages, is that they do inflate awards by encouraging irrational thinking from jurors. The article cites the New Jersey Supreme Court, for example, noting that it is beyond doubt that the purpose of the per diem language “is to instill in the minds of the jurors impressions, figures and amounts not founded or appearing in the evidence.”
In determining whether per diem demands actually do increase those amounts, it is necessary to distinguish between the effects of a lump sum demand and a per diem demand, something that prior research did not do. In the Campbell, Chao and Robertson study, they tested four scenarios: The plaintiff asked for lump sums, per diem amounts, or both, or neither.
When it came to lump sum requests, the answer to whether it increased awards was a clear “Yes,” as larger lump sum demands did predict larger verdicts. That is consistent with a long line of research on the “anchoring effect,” showing that big asks tend to cause jurors to start with a bigger number in mind and ultimately award more. The researchers, however, did not find the same when it came to per diems: Holding the lump sums constant, the use of a per diem was not significantly associated with a higher award.
The Unexpected Answer: Per Diems Do Help Plaintiffs in Another Way
So if the use of per diems doesn’t predict higher damages, what do they do? In the study, it turned out they made it more likely that mock jurors would find in favor of the patient-plaintiff on the question of whether the physician violated standard of care. That might sound counterintutitve: A way of expressing damages is a statistically significant predictor of liability. However, this finding is consistent with what researchers call the “fusion effect” relating to jurors’ tendency to blur the questions of liability and damages. Stronger liability evidence predicts a higher likelihood to assign high damages, and conversely, a stronger damages case predicts a higher likelihood of finding liability.
The researchers explain the effects of a per diem request in similar terms, suggesting that they work, “perhaps because they allow plaintiffs to explain the basis for a large request.” They also reason that per diems may help to preserve the credibility of the side asking for high damages by adding to jurors’ understanding and sympathy for the noneconomic categories, and thereby helping the case to look like it is driven by something other than greed.
The Response for Courts, Plaintiffs, and Defendants
For courts, the researchers’ argument is that there isn’t a clear basis for excluding the per diem request. The fact that breaking damages into a unit of time makes it easier to focus on the details or the seriousness of the injury and, as a result, makes it easier for jurors to find liability just indicates that it is good communication. And that puts the tactic in the category of “effective advocacy” rather than the category of “unfair advantage.” With only a bare majority of 26 states clearly allowing per diem requests, this study showing no effect in artificially inflating damage awards might provide ammunition for those seeking to expand that number.
For plaintiffs, the message is simpler: If the law allows you to, use per diems when asking for noneconomic damages. It won’t necessarily ramp up your damages, but it will help jurors treat those noneconomic categories meaningfully, and that will help your case overall.
For defendants, the implication is a little more complicated. I have written in the past that when defendants offer their own anchor, it helps to limit the damages. But it does not make sense for defendants to apply the same to per diems. For example, saying that the plaintiff’s suffering “isn’t really worth $1 per hour, but really should be more like 20 cents per hour,” does not sound good, and might even pave the way to $5 per hour. In other contexts, we have noted that sensitizing jurors to a bias can work in limiting its effects. While it has not been researched, it is probably worth giving it a shot in closing if the other side is emphasizing per diems:
You might wonder, why are they breaking this into minutes? The reason they are doing that is to make it more concrete and definite in your mind. Of course, there is no meter, and nothing in the law and nothing on the verdict form will ask you to award these damages by the minute. So it is really just the plaintiff who is breaking it down this way, calculating that this will increase their odds in this case. But don’t fall for it. Should you get to the point of looking at damages, it is the lump sum you would be awarding, so it is the lump sum you should be thinking about, not any artificial breakdown on that number.
Other Posts on Damages:
- Make Your Damages Numbers Meaningful
- Aim Your Damages, And Your Case, at “The Golden Mean”
- When Arguing Damages, “Drop Anchor” Even in Murky Waters
Campbell, J., Chao, B., & Robertson, C. (2017). Time is Money: An Empirical Assessment of Non-Economic Damages Arguments. Wash. UL Rev., 95, 1.