Why Do You Need Litigation Risk Management / Settlement Valuation?
When litigation threatens, you are required to make difficult decisions that have potentially major consequences:
- Should we settle? If so, how much should we pay?
- How much should we spend to defend this case?
- How much, and in what areas, should we spend on discovery?
- What are the most critical issues and how much effort and attention should we focus on each?
You must make these decisions in the face of challenging complexity and significant uncertainty about most factors in the case. You must keep vigilant control over costs. Above all, you must be right. Finally, you are expected to be able to convey all of this information, despite its uncertainty, to management and clients in a clear and concise manner.
Yet the input you get from, or provide as, counsel is often vague: “You know, we have a great case, but we could still lose!” Language like this, although it best conveys counsel’s judgment about uncertainty in qualitative terms, offers little quantitative information upon which to discuss or base multi-million dollar settlement decisions.
The overriding uncertainty in litigation is the trial outcome, which ultimately cannot be controlled. You can, however, identify and focus on your decisions, which you do control, and how they can be expected to effect the outcome. You will never eliminate all the risks in your litigation, but you can manage risk in a cost-effective manner!