October 06, 2008

Study: Settling Better Than Winning a Lawsuit

The results of a study of 2,054 California civil cases that went to trial from 2002 to 2005, indicates that most litigants who forgo a settlement offer end up with less money by going to trial. According to Randall L. Kiser, a co-author of the study published in a Cornell law journal, plaintiffs made a bad decision 61 percent of cases and defendants in 24 percent of cases. In just 15 percent of cases, both sides were right to go to trial (i.e., the defendant paid less than the plaintiff had wanted but the plaintiff got more than the defendant had offered). (Journal of Empirical Legal Studies; NY Times.)

The statistics continue to reinforce the conventional wisdom that alternative dispute resolution is a rational decision for stakeholders. This fact points to continued growth for the Organizational Ombuds profession.

1 comment:

  1. Important to bear in mind that while on the one hand this reinforces the ADR ideal, it oon the other takes AWAY a component of the Organizational Ombuds value rationalization of preventing costly legal OUTCOMES. The legal process is still expensive in several dimensions, but this study shows that the OUTCOMES of the legal process are actually usually BETTER/LESS EXPENSIVE for say the company in an employment dispute than they are for the plaintiff.

    I can hear certain internal and external litigators turning this study on its ear to their GCs saying - I can get you a less expensive outcome in court than that settling so-and-so Ombuds.