Academic journal article Iowa Law Review

Countering the Plaintiff's Anchor: Jury Simulations to Evaluate Damages Arguments

Academic journal article Iowa Law Review

Countering the Plaintiff's Anchor: Jury Simulations to Evaluate Damages Arguments

Article excerpt

I. INTRODUCTION

Although jury trials are rare, they still drive nearly all legal outcomes because rational litigants negotiate in their shadow.1 For any given case, the likely outcome at trial is what motivates litigation decisions, drives how much money is spent developing the case, and ultimately determines settlement value. Thus, jury behavior remains important.

Numerous studies establish that the jury's damages decision is strongly affected by the number suggested by the plaintiff's attorney, independent of the strength of the actual evidence (a psychological effect known as "anchoring").2 Indeed, the strength of the effect appears so powerful that some researchers advise that "the more you ask for, the more you get."3 Yet many questions remain unanswered.

For the plaintiff's strategy, these include: is there a limit to the anchoring effect that a plaintiff's attorney can induce? Common sense suggests that, at some point, a proffered anchor would be perceived as so outrageous as to undermine the credibility of the speaker. But at what point, and does the expected value of the case shift such that the risk of losing liability offsets the marginal dollar gains of the positive verdicts?

For the defendant, what strategy should his or her attorney use to counteract the plaintiff's attempt to anchor with a high ad damnum (damages demand)? Can a defendant attack the plaintiff's high demand and thereby undermine the plaintiff's credibility? Alternatively, should defendants provide a lower damages number to the jury? Such a "counter-anchor" could wash out the plaintiff's anchoring effect, but some attorneys worry juries will interpret such a response as a concession of liability. But are concession effects real?

This study seeks to contribute answers for these questions. To do so, we videotaped a shortened medical malpractice trial with two different plaintiff damages demands and three different defendant responses. Using Amazon Mechanical Turk, we recruited 776 qualifying participants to view our mini-1. trial and render decisions on liability and damages. We ran a computer simulation to aggregate randomly selected individual jurors' decisions to create mock juries and analyze their verdicts. Our study found powerful anchoring effects dominate much smaller but still statistically significant credibility effects. We also detected differences between the defendant's responses to the plaintiff's low damage demand. Surprisingly, countering with a lower alternative damages number actually improved defendant's win rate, but did not lower damages. However, when the plaintiff demanded an unreasonably high award, none of the defendant's responses produced a statistically significant difference in outcomes.

The answers are important for both litigators and policymakers. For policymakers, in particular, it is important to determine whether the anchoring effect is unduly biasing jury decisions. An affirmative answer would motivate rules to regulate plaintiff demands ex ante, as some states have already done, or to provide some reference points to jurors, as scholars have suggested.4 Alternatively, some may conclude, as many states have, that allowing demands for pain and suffering at trial is preferable to leaving the jury to make such awards in the absence of guidance, that awards can be addressed through existing damage caps, or that use of remitter is sufficient to curb any runaway awards. If, on the other hand, defendants already have effective strategies for countering the biases of plaintiff anchoring, then this may be simply the adversarial process at work.

II. BACKGROUND

A. ANCHORS

One major component of a jury's decision is the damage award. Numerous studies have suggested that a successful plaintiff can obtain a higher damage award simply by offering a higher ad damnum, that is, requesting more money from the jury.5 Psychologists call this an "anchoring effect," referring to when "individuals' numerical judgments are inordinately influenced by an arbitrary or irrelevant number. …

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