[ Pobierz całość w formacie PDF ]
case, the Jones s car skidded from the road on the right side, travelled
approximately fifty yards, and struck a tree.
Before impact, Bill and Connie, both wearing their seat belts, braced
themselves and were only slightly injured. Unfortunately, Betty was not so
lucky. The seat belt constraining the chair in which she was riding broke,
allowing her to be thrown through the windshield. Immediately she was
transported to the hospital, where she had an arm amputated and then hov-
ered between life and death for months. She won the battle for life, but the
surgeon informed Bill and Connie that she had suffered severe brain damage
and had no chance of functioning as a mature adult. In all probability she
would need close medical and personal care for the rest of her life, the length
of which was highly uncertain. In addition to these overwhelming difficul-
ties, she would be severely disfigured with scars.
After a year and some intense reflection, the Jones s approached a lawyer,
discussed the situation with him, and agreed to employ him on a contingency
basis (30 percent of the award to the lawyer if the case were settled out of court,
50 percent if it were taken to trial, and nothing if the case were lost) in a $3 mil-
lion suit against the automobile manufacturer, who was allegedly liable for the
faulty seat belt. The lawyer filed the suit, and the manufacturer employed a
local lawyer to handle its defence. After nine months the case came before the
bench, and the judge scheduled a pre-trial conference. One purpose of such a
hearing is the establishment of the facts of the case; that is, each lawyer notes
which points are agreed upon (for example, the wreck occurred, the child was
thrown through the windshield, the seat belt broke, the seat belt had been
worn or damaged prior to the accident, and the child s arm had to be ampu-
tated) & and which points are in dispute (for example, that the father was at
fault, that the seat belt had been worn or damaged prior to the accident, that
the child had sustained permanent brain damage, etc.). &
Having handled these affairs, the judge asked the lawyers whether or not
they had considered settlement negotiating an agreement out of court*.
In the conference, with the negotiation off the record, the plaintiff s (the
Joneses ) lawyer demanded $3 million, noting that the seat belt had broken
and failed to constrain a child of only about twenty-seven pounds, and thus
the company was liable for the grave and costly damages. The defendant s
(manufacturer s) lawyer opened with an offer to settle for $50,000 dollars,
noting that his client felt there was liability in the case but that the plaintiff
* Over 90 percent of the civil cases filed each year [in the USA] are settled out of
court (97 percent in California). Thus, justice in the civil setting is usually deter-
mined by negotiation.
48
Distributive bargaining
had been at fault, that the belt appeared to have been damaged prior to the
accident, and that the child s brain damage was not as severe as claimed. He
then pointed out that plaintiff s lawyers typically ask for more than they
expect and that the negotiation would be expedited by the plaintiff s lawyers
quote of the amount that his clients really wanted. The plaintiff s lawyer then
quoted $1.5 million. To this the defendant s lawyer quoted some figures
(lower than $1.5 million) that insurance companies had previously paid in
similar cases. After more wrangling back and forth, the plaintiff s lawyer
quoted a rock-bottom figure of $1 million. Here there was a stalemate, and the
judge asked both lawyers to consult their clients and report back the next day.
In the next session both lawyers attacked the case of the other and
defended their own. The plaintiffs lawyer noted that juries were sympa-
thetic to this type of case and would no doubt grant about $1 million to his
client if the case were taken to trial. The defendant s lawyer noted that his
expert witnesses would undermine the plaintiff s case in any trial. Both sides
conceded, the plaintiff s lawyer came below his rock-bottom figure, and the
defendant s lawyer rose to $75,000. At this point one of the attorneys asked
the judge for his opinion. He said he felt the case was worth $100,000 and
told both lawyers to discuss this figure with their respective clients.
Subsequently, both sides accepted, and the case was not taken to trial. An
interview with the defendant s lawyer revealed that he had been instructed
to settle for no more than $1 million. (The names, details and some figures in
this case have been altered to protect the identities of all parties).
(Quoted from Wall, 1985)
Errors
Where did the plaintiff go wrong? It is true that an award of $100,000 is
something of a success when the evidence is not rock solid, but as we
now know it was still only ten per cent of the sum that could have been
obtained. Certainly the plaintiffs could have got a larger sum if the case
had been handled more skilfully. Think about it for a moment before you
read on what would you have done differently? Let us go over the
course of events once again. Many of the plaintiff s approaches were
very unfavourable to him in this case, and should generally be avoided
in negotiations.
49
Distributive bargaining
Table 2-1 Course of negotiations for compensatory damages
Jones s attorney Manufacturer s Grounds
attorney
$3m. Damages claimed for equipment failure
$50,000 Jones responsible for accident,
plaintiff s claim excessive
$1.5m. Second claim following concessions
$50,000 Cites comparable cases with lower
settlement award
$1m. Declared to be minimum claim
$75,000 Offer increased, but experts cited
who demolish million dollar claim
$1m. $75,000 Negotiations deadlocked
Judge proposes $100,000
$100,000 $100,000 Both sides accept
No reservation price
In the case just quoted, the Jones s did not instruct their lawyer in
advance of what minimum damages he was to press for in the event of
an out-of-court settlement. Instead, they gave him a completely free hand
in the proceedings. This is tantamount to a reservation price of zero. This
omission is readily traced back to lack of adequate preparation. We have
seen what the consequences were: for the lawyer it was obviously better
to be assured of receiving a fee of $30,000 (30% of $100,000) than half of
an unknown sum the court would have awarded. Not a bad result for so
little work, even if more could have been got out of it. Why should he
refuse? The situation of course looks very different for the Jones s, who
in fact suffered an enormous personal and financial loss. In such a situa-
[ Pobierz całość w formacie PDF ]