Are Attorneys Part of the Problem? How Attorneys May be Contributing to Outsized Settlements

The growing number of outsized settlements has raised serious concerns in recent years. Class action and government enforcement settlements were worth over $66 billion in 2022 and more than $51 billion in 2023. When taken as a whole, the total settlement history of the last three years surpasses any other three-year span in legal history. Verdicts and settlements in individual corporate litigation are also growing, leaving insurance companies and self-insured businesses scrambling for answers. 

Understanding the Challenge

How can defense attorneys avoid these outsized settlements and verdicts? These large awards and settlements often seem to defy logic, especially in cases where the facts or damages may not necessarily justify the outcome. 

A key question to ask is whether defense attorneys themselves might be contributing to these outcomes, either intentionally or unintentionally, through strategies and actions during the litigation process. 

What factors affect outsized settlements and verdicts?

Four factors that may be contributing to excessive settlements and verdicts are: 

1.  Ineffective witness preparation, which results in low credibility and a weak defense;

2.  Ineffective testimony strategies, which cause witnesses to appear evasive and unable to take responsibility for their actions;

3.  Procedural errors, such as excessive use of objections that can alienate jurors;

4.  Failure to humanize corporate clients portrays them as impersonal entities rather than relatable individuals.

The Role of Attorneys in Verdict and Settlement Outcomes

Attorneys are not the only factor contributing to large settlements and verdicts, but they may play a part. The process of reaching a settlement is intricate, and attorneys determine how cases unfold. They are the gatekeepers whose choices, strategies, and even attitudes can affect whether a case settles for a sum considered "outsized."  

Don’t Contribute to Outsized Settlements

The Power of Emotional Appeals

The defense needs to keep in mind that during high-stakes cases, particularly those involving significant financial loss or injury, plaintiff attorneys are often highly motivated to secure a substantial outcome for their clients. This increased motivation can lead to a focus on aggressive tactics designed to maximize the perceived value of the case. 

Strategies can involve presenting the case in a way that highlights emotional harm, the defendant's character defects, or making legal arguments appear more compelling than they are. When successful, this strategy may increase a case's emotional appeal by shifting the narrative to highlight its human aspect, which has often resulted in larger settlement offers. 

When the plaintiff attorney seeks an outsized settlement, a balanced approach is highly important for the defense. “Owning" conduct and decisions rather than defending them is a critical concept the defense needs to keep in mind. 

Juries deeply respect when a witness owns their actions, even if they are imperfect – particularly when trying to present the defendant in the best light possible. Defense attorneys who fail to humanize their clients might inadvertently contribute to an outsized settlement.

The Pressure of Client Expectations

Plaintiffs often want to secure the maximum possible compensation, and their attorneys, eager to meet these expectations, can purposefully seek to amplify aspects of the case that lead to outsized settlements, even when the evidence does not fully justify such an amount. That’s an important aspect to consider, as it could potentially give the defense a way to mitigate damages. Look closely at the evidence – challenge the emotional narrative and scrutinize and dispute claims of excessive suffering with objective evidence.

The need to appease clients can sometimes lead a defense attorney to engage in settlement discussions that tilt toward an outcome that might be considered excessive. However, the defense must keep in mind that a settlement conference when the plaintiff's case is weak can result in a higher settlement than the case's facts might have indicated. 

This dynamic is particularly evident in personal injury and malpractice cases, where the emotional or long-term impact plays a significant role in the plaintiff’s case. Their goal is to use a strong-armed settlement tactic to overshadow the legal merits of the case and gain a desirable result for the complaint before the case goes to trial.

Furthermore, plaintiffs suffering from significant injuries or losses often believe their pain and suffering deserve a substantial payout. A plaintiff’s attorney, aware of this emotional component, will craft arguments that appeal to jurors during the trial. 

Building a Strong Defense Strategy

Defense attorneys aware of these tactics can take proactive steps:

➔Approach settlement discussions with a strategy grounded in documented evidence and legal standards while resisting pressure from emotionally charged plaintiff claims. It helps to educate and keep the defense client informed on why the plaintiff is applying such pressures. 

➔Utilize expert testimony and introduce experts who can provide balanced, fact-based analyses that question the extent of the claimed damages.

➔Implement strategic jury selection tactics and focus on jurors who are less likely to be swayed by emotional appeals and more inclined to evaluate the case based on its legal merits.

➔Strengthen pretrial preparation and build a robust factual record that emphasizes causation and the actual extent of damages – keeping the legal issues central to the discussion.

Over-Objecting and Legal Traps

Another area where defense attorneys can unintentionally contribute to outsized settlements is through their handling of depositions and objections during discovery. 

Defense attorneys may sometimes over-object to personal questions during depositions, thinking they are protecting their clients. However, this can backfire in ways that benefit the opposing party. If attorneys object too aggressively to personal questions, it can give the impression that the witness has something to hide, which may end up hurting their credibility in court.

Over-objecting can create legal traps. If attorneys make certain issues seem irrelevant in one phase of litigation, they may be forced to confront them in a more unfavorable context later on. 

For instance, if a corporate witness objects to personal inquiries during deposition, they may be denied the opportunity to portray themselves as a person. Then, at trial, the opposing counsel may use the refusal to answer those personal questions to argue that the company is simply a faceless entity rather than a responsible human actor. In addition to harming the witness's reputation, this could intensify the case and result in a higher settlement demand.

Defending the Client Can Be a Double-Edged Sword

There is a delicate balance between defending and over-defending. When witnesses adopt a defensive posture, they risk losing the respect of the jury. A defensive attitude often triggers a "fight or flight" response, which can cloud their judgment and lead to further mistakes. 

Jurors are likely to distrust witnesses who get argumentative, evasive, or seem to be trying to twist the story in their favor – this results in a lower chance of favorable judgment for the defense. This can, in turn, increase the pressure on both sides to settle for an amount that compensates for the perceived risks.

Escalation may also result from the defense process, particularly in high-value cases. Attorneys risk unintentionally raising the case's financial stakes when they place an excessive amount of emphasis on minimizing harm based on their client's actions or reputation.

The more a case escalates, the more likely a settlement will be reached at an amount higher than what was initially deemed appropriate. In order to avoid the uncertainty of a trial, defense attorneys may end up settling for more than the case is worth, a situation that might contribute to the cycle of disproportionate settlements.

Ethical Dilemmas and How to Balance Advocacy with Reason

Maintaining fair and reasonable settlements while standing up for their clients is a delicate balance that plaintiff attorneys should maintain – unfortunately, that’s not always the case. 

When the plaintiff's attorney engages in overly aggressive strategies or encourages unrealistic client expectations, it can drive the case to a point where an outsized settlement seems like the only viable option. It is up to the defense to understand tactics used by plaintiffs and not contribute to the problem while steering the case away from an outsized settlement.

The goal of litigation should be to bring about a just outcome, not simply a financial windfall. Defense attorneys can work with expert litigation consultants to apply better strategies, based on behavioral science, against plaintiff attorneys focused on maximizing settlements. Not doing so could contribute to the broader issue of outsized settlements, which can undermine the credibility of the legal system and fuel the cycle of increasing litigation costs.

Minimizing Outsized Settlements With Courtroom Sciences

Attorneys are tasked with advocating for their clients to the best of their abilities – but they must also recognize their role in the broader context of the legal system. When strategies and expectations run unchecked, outsized settlements become an unfortunate byproduct of a legal process that should be grounded in reason and justice. 

Courtroom Sciences helps attorneys efficiently navigate litigation by providing psychological expertise, science-backed data, and expert support for all phases of litigation. Learn how CSI's litigation consulting experts can improve outcomes for your next case. Speak with one of our experts to get started.

Key Takeaways:

●  Poorly prepared witnesses can risk appearing defensive or evasive, which undermines their credibility and can increase settlement demands.

●  Overly aggressive or poorly balanced strategies can unintentionally amplify a case's perceived value and lead to outsized settlements.

●  Failure to portray corporate clients as relatable individuals rather than faceless entities can alienate jurors and increase settlement amounts.

●  Excessive objections during depositions can harm witness credibility and create traps that escalate the case’s financial stakes.

●  Plaintiff attorneys may pursue large settlements to appease clients, even if the evidence does not fully support the payout.

●  Striking a balance between representation objectives, client demands, and fair settlements is crucial to maintaining trust in the legal system.