On the Edge of the Precipice

Standing on the edge of a glacier with Bruno, our guide (and philosopher), we were looking across at the steep, steep face of the opposite hillside where, in the far distance we could make out the ant-like figures of half a dozen intrepid ski tourers using skins on their skis to make the ascent to the top of a ridge from where they could travel on from France into Italy. The avalanche risk was at 4 out of 5 that morning after overnight snow and a season of remarkable snowfall. They were spread out across the face, probably roped, as they crossed below a couloir full of snow hanging above them. We were holding our breath.

We talked of the nature of risk. Bruno swore that they were taking a risk in these conditions that he, with over 30 years of experience of the mountains, would not himself take, least of all with clients in tow. But 25 years ago? He could not be sure. After all, he was now better able to accurately assess the risk and the consequences of disaster. Then he was footloose and fancy free, now with the responsibilities of wife and child. The odds had not changed, but his ability to assess them and willingness to take a risk had. Those ants on the hillside had assessed the risk one way, Bruno another. Yet all were familiar with the disasters that can befall in the mountains.

It set me thinking about the nature of risk in litigation and how different people respond to it.

 

Whilst reading a recent judgment by Mr Justice Foskett the following paragraph caught my attention (a link to the judgment can be found

here

):

“How one side perceives the risks in a piece of litigation (whether in the clinical negligence sphere or any other sphere) will almost invariably be different from the way the other side perceives them. Quite often in my experience as a practitioner and, more particularly, as a mediator, a settlement of a case was achieved when there were widely differing views of the risks on both sides. Settlement did not require a meeting of minds on the nature of the litigation risks of each side”

 

It’s impossible to fault Foskett J’s comments. In over 1400 cases I’ve mediated, many are the times that I’ve come across when one party insists it has a 75-80% chance of succeeding in its claim and in the other room they are 75-80% certain they will successfully defend. But it does not follow that there is an appetite to test at trial the 1:4 or 1:5 chance of disappointment with all its consequences. The truth is there is always a strong argument for a claimant’s discount or a defendant to pay a premium in order to achieve the certainty which continuing litigation cannot give.

So, why is ‘buying’ certainty by compromise so important? There are people who thrive on litigation, who enjoy the cut and thrust, the game, and who can rarely be persuaded that settlement is for them. Indeed, in a recent case, a claimant openly declared to me and his opponent that he welcomed litigation as his chance to ‘out’ his opponent as a liar and a thief and obtain the maximum possible publicity in the media. He would settle, but only if it were such a large sum as to represent punishment – i.e. way higher than any risk analysis would rationally suggest.

But this is rare. The great majority prefer to avoid confrontation, recognise its emotional toll and value the benefit of being able to get on with life and pursue future goals without being encumbered by the negativity of past disputes. They also recognise the inherent uncertainty of litigation. No Finance Director likes monthly bills for running litigation without any certainty of future recovery – even worse, with the residual risk of an Order for the other party’s costs if it all goes pear shaped.

With the skiers, there will always be those few who thrive on the thrill of the risk and are prepared to put their lives and those of others on the line. But the vast majority would rather not climb past the high risk laden couloir and will opt for the safer route down.