I’ve long thought that litigators should more frequently use litigation risk analysis using formal decision trees.
I am swimming against the tide. In Making the Case for Change (ABA Journal, April 2008), the sub-article Case Evaluation: Too much emphasis on a quantitative approach often misses key factors by Louis M. Solomon of Proskauer criticizes over-reliance on decision trees: “An overly numerical approach to case evaluation has serious limitations. Formal case evaluation seeks to achieve an optimal identification of possible outcomes, but perfection in the process cannot be achieved. An unthinking use or overuse of mathematically driven case evaluations does not serve clients well.”
Beyond complexity, Solomon lists three limitations of decision trees:
1. Overemphasis of quantifiable factors
2. Discounting small probabilities
3. Inadequate consideration of the client’s risk tolerance
He closes, however, by acknowledging its potential value, especially to dispel fuzzy thinking and statements like “you have a good chance of winning.”
I’m not a litigator and I don’t know the right answer. But I view this technique as I do drugs, devices, or medical procedures. What does the evidence say? I’m not sure enough litigators and clients have used decision trees properly and compared alternative risk assessment methods to reach an empirically sound conclusion. Sure decision trees are hard and have limits. But for cases about money (and most are), what is the better approach to assess risk and set up a framework for discussing decisions? If achieving “perfection in the process” is the standard, we may as well give up at the outset. The fact that doing risk analysis is hard may mean lawyers need more training, not that they should ignore a potentially valuable technique.