Last time we continued our discussion on the mistakes lawyers and their clients make in settling eminent domain cases. The focus of our discussion was: Let’s Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations an article co-authored by Randall L. Kaiser et al.[i]
We examined the frequency lawyers and their clients commit decision error in settling cases. According to the study, plaintiffs committed decision error more frequently than defendants, but the cost of the defendants’ decision error was significantly greater.
Today we will look at two interesting questions regarding settlement decision errors:
(1) Do the qualifications of counsel for the parties matter?
(2) Does it matter whether a judge, jury or arbitrator makes the just compensation determination?
Before we dig into the details, what is the take home message? The bottom line of all this can be summarized for our purposes fairly directly. Settlement decision errors occur with regularity and sometime at significant cost. What does this tell us? That mediation of eminent domain cases, using a mediator with significant subject matter experience in eminent domain and employing evaluative techniques as part of the arsenal of available tools may be able to cut the frequency and cost of settlement decision errors.
Effect of Attorney-Mediator as Counsel
Information from the study regarding the effect qualifications of counsel had on the frequency of settlement decision errors is limited, but worth examining. Determining the “qualifications” of counsel is difficult, and the effect of those qualifications on outcomes can be downright ephemeral. Nevertheless, the researchers responsible for designing the study did find one worthwhile benchmark. What if one of the attorneys included in the study was also a mediator?
The researchers identified Attorney-Mediators who had represented one party in cases tried to conclusion. Of those, 369 were located which met the case selection criteria for the primary study data set. They found 369 cases (of all categories) in which counsel for one of the parties was an Attorney-Mediator (AM). Of these, 169 represented the plaintiff (AM-P) and 200 represented the condemning authority) (AM-D). Unfortunately, this study did not report these data with respect to condemnation cases in isolation. Here are the results:
Frequency of Error
Attorney-Mediator Data Set[ii]
All Cases* AM-P AM-D
Plaintiff error 194 / 52.6% 82 / 48.5% 112 / 56.0%
Defendant error 97 / 26.3% 54 / 32.0% 43 / 21.5%
Total error 291 / 78.9% 136 / 80.5% 155 / 77.5%
No error 78 / 21.1% 33 / 19.5% 45 / 22.5%
362 / 100.0% 169 / 100.0% 200 / 100.0%
As discussed in the first article in this series, settlement decision errors occurred in 85.5% of the cases in the primary data set. Here, in cases in which an Attorney-Mediator served as counsel for one of the parties, that error rate was reduced to 78.9%.
More specifically, when Attorney-Mediators represented the landowner, the error rate went from 61.2% in the primary data set down to 48.5% here. But, the same was not true with respect to Attorney-Mediator representation of condemning authorities; the error rate went up from 24.3% to 32.0%.
It would be a stretch to say Attorney-Mediator qualified counsel in condemnation cases provides an advantage, but it certainly can be said that these data give some rough indications that are worthy of further investigation and study. The more which can be learned about the effect of attorney qualifications vis-à-vis settlement results the better.
Effect of Forum
Does it matter—with respect to settlement decision error—whether a judge, jury or arbitrator makes the just compensation determination?
First we must recognize that in the study we are examining, the overwhelming number of cases were tries to a jury—90%. Nevertheless, the data give us an insight into the difference the type fact finder makes.
First decision errors by condemning authorities and their counsel made about the same number of settlement decision errors in arbitrations, 45.4%, as they did in bench trials 42.6%. There is some logic to this I suppose—in both cases the decider(s) presumably had some level of expertise in the task at hand. But very surprisingly—to me at least—these error rates were approximately double the error rate in jury trials, 22.1%. these error rates were nearly double that in jury trials.
The error rate outcomes from, the standpoint of landowners and their counsel, is more in line with my “gut feel.” Arbitration: 28.9%; Bench trials: 42.6%; and Jury trials: 64.0%.
Decision Error and Cost of Error[iii]
Arbitration
No error 25 / 25.8%
P error 28 / 28.9%
D error 44 / 45.4%
Bench Trials
No error 16 / 14.8%
P error 46 / 42.6%
D error 46 / 42.6%
Jury Trials
No error 255 / 13.9%
P error 1176 / 64.0%
D error 407 / 22.1%
[i] Randall L. Kiser, Martin A. Asher, Blakeley B. McShane, Let’s Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations, Journal of Empirical Legal Studies, Volume 5, Issue 3, 551-591, September 2008.
[ii] Randall L. Kiser, Martin A. Asher, Blakeley B. McShane, Let’s Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations, Journal of Empirical Legal Studies, Volume 5, Issue 3, 586-589, September 2008.
[iii] Randall L. Kiser, Martin A. Asher, Blakeley B. McShane, Let’s Not Make a Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations, Journal of Empirical Legal Studies, Volume 5, Issue 3, 579-581, September 2008.
