USA – MISSOURI Trends and Developments Contributed by: Craig S. O’Dear, CSO Law LLC
judgment and is presented to a jury, will have at least a 15% chance of winning. This illustrates the inherent uncertainty of outcomes in litigation. And, if you approach the process with the risk management mindset discussed above, it will be a rare case that does not justify assessing at least a 15–20% chance of success. Such lack of certainty, especially in high-value cases involving tens or hun- dreds of millions of dollars, informs the wisdom of The number one mistake to avoid is never forcing your opponent to make a decision. How do you force a decision? Make an offer. Or a demand. Offers and demands must be conveyed to the opposing client, and they have to make a decision. Do you accept the offer? Do you pay the demand? The opposing party has to decide. The author will use a case to illustrate the point. He was hired in an aviation case 60 days before trial. It was a tragic accident involving a couple with four adult children. The airplane crash did not kill the cou- ple on impact; they burned to death. Difficult case to defend, and plaintiffs’ counsel knew it. They had presented a USD120 million “non-negotiable” settle- ment demand over a year prior, and the international insurance consortium, who very much wanted to set- tle the case, refused to make an offer, because “with a demand that high, even if we offer just USD1 million, it suggests we might pay USD50–60 million.” settlement to manage that risk. Make your opponent decide In the author’s first call with a half-dozen international aviation underwriters, he listened to their concerns, and then they asked for his advice. He told them they were focused on the wrong issue. They were focused on the demand – “what the plaintiffs wanted”. That is irrelevant, he told them. What you need to find out is “what they can’t say ‘no’ to”. Cases rarely settle for what the plaintiff “wants”. They settle when you offer an amount the plaintiff “cannot say ‘no’ to”. The lawyers then executed the strategy the author recommended. He told counsel for plaintiff, “I have authority to settle this case for a lot of money. I don’t know if it is enough money. But my clients need to
find out if it is enough, and so do you and your clients. Because we are short on time, I am going to make an opening offer that is most of what we have to settle. If, and only if, your clients then make a huge reduc- tion in their demand, signaling they are interested in a settlement in the neighborhood we are suggesting, I will then offer nearly all the money we have. I will hold back only a small amount to close the deal if we are close.” This is a framework the writer has used with success in several high-value, high-exposure cases. The team had “a little over” USD20 million in settle- ment authority, which the author interpreted to be USD25 million. He pushed to offer USD18 million, and a member of the insurance consortium argued it would lead to pressure to settle for USD50 million or more. But the vote was to let the author execute his strategy. The team offered USD18 million, with the explanation telegraphing their following moves if they received appropriate counters. The “non-negotiable” demand that had been in place for over a year was reduced to USD45 million. The author then offered USD22 million. That produced a counter of USD28 million. The case was settled at USD25 million. The plaintiffs “wanted” USD120 million, but the writer believed there was a good chance they could not say “no” to USD20 million. Once the team signaled they could get at least USD20 million on a risk-free basis with no trial, the plaintiffs took control of the negotia- tions and instructed their lawyers to get as much over USD20 million as they could. They achieved USD25 million. Why had the case remained stuck at USD120 million “non-negotiable?” Because the insurance consorti- um refused to force the plaintiffs to make a decision. The author used a line with these clients that he had used in the past. Do not underestimate the power of USD20 million. The CIA can overturn governments with USD20 million (this was a few years ago; the price may have gone up). They may say “no” to USD20 mil- lion, but they may start thinking about what they can do with that money, and they may be unable to walk away from it. In this case, they did not walk away.
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